- Weak supply recovery limits market downside
- Steel off-season continues to dampen demand
CBC: The Chinese ferro silicon market remained steady, but trading was subdued amid weak demand and cautious sentiment. Steel mill procurement slowed, and downstream margins narrowed. Low operating rates and high production costs limited supply recovery.
Grade 72% silicon: Prices remained largely steady w-o-w at RMB 5,240-5,400/t ($730-752/t) ex-factory, inclusive of taxes.
Grade 75% silicon: Prices remained unchanged w-o-w at RMB 5,620-5,760/t ($783-802/t).
Market updates
Market sees limited activity, weak supply recovery: The ferro silicon market remained steady, as both supply and demand were cautious. Spot activity was influenced by steel mill bidding and pricing, which led to a largely wait-and-watch sentiment. Some regions witnessed need-based demand, but overall, trading was subdued.
On the supply side, pressure persisted. Operating rates in major production areas stayed low. Although some production resumptions were expected in regions such as Ningxia, high costs kept most producers unmotivated, and in the short term, supply growth may remain limited.
Demand remains tepid amid seasonal lull: On the demand side, the off-season in the steel market slowed down procurement by mills. Margins in downstream sectors such as magnesium metal also shrank, resulting in a marginal weakening of ferro silicon demand.
In terms of costs, coke and electricity prices remained stable. However, market expectations for future electricity price adjustments were divided, and the strength of cost support was still uncertain.
Outlook
In the short term, ferro silicon prices are expected to remain range-bound, with limited momentum amid weak supply and demand. However, potential production resumptions and inventory build-up may exert downward pressure.
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