China: Ferro silicon prices inch down w-o-w on soft demand, bearish sentiment

Persistent price drops and weak demand deepen the market downturn

ZCE futures (Jul’25) drop slightly by $18/t w-o-w

CBC: Ferro silicon prices declined over the week as the market remained weak and uncertain. Limited production recovery, sluggish downstream demand, and reduced cost support from low blue carbon prices and expected tariff changes continued to weigh on overall market sentiment.

Grade 72% silicon: Prices inched down by RMB 230/t ($32/t) w-o-w to RMB 5,420-5,580/t ($752-775/t) ex-factory, inclusive of taxes.

Grade 75% silicon: Prices dropped by RMB 240/t ($33/t) w-o-w to RMB 5,650-5,830/t ($784-809/t).

Market recap

Spot prices fall across key regions: The ferro silicon market continued to face weakness and volatility, with spot prices further declining across key production hubs. Although a few producers have resumed operations due to mounting cost pressures, overall production rates remain subdued.

The impact of output cuts on destocking is yet to be seen, while elevated levels of warehouse receipts are restricting spot market liquidity, keeping supply-side pressure intact.

Downstream demand remains weak: On the demand front, sluggish growth in crude steel production, a depressed magnesium metal market, and a cautious stance from steel mills have all contributed to limited buying interest.

Meanwhile, expected changes in electricity tariffs, coupled with low blue carbon prices, have reduced cost support. With both market fundamentals and sentiments are under pressure, the market is trapped in a downward cycle of weak conditions and low confidence.

ZCE futures inch down: On 5 June, ferro silicon prices on the Zhengzhou Commodity Exchange (ZCE) for July 2025 delivery were slightly down by RMB 126/t ($18/t) w-o-w to RMB 5,196/t ($723/t) from RMB 5,322/t ($741/t).

Outlook: In the near term, ferro silicon prices will likely remain weak and volatile. Rising summer electricity costs will potentially trigger a technical rebound, but slow steel mill demand and further declines in blue carbon prices will likely drive prices down, increasing the risk of sharp market sell-offs.