- Cost pressures keep producers wary about lifting output
- Weakening downstream profitability dampens demand
CBC: The Chinese ferro silicon market remained stable, supported by tight supply and cost pressures. However, demand was subdued due to the steel sector slowdown and weak downstream profitability, with policy uncertainty over electricity prices adding caution.
Grade 72% silicon: Prices edged up by RMB 100/t ($14/t) w-o-w to RMB 5,340-5,500/t ($746-768/t) ex-factory, inclusive of taxes.
Grade 75% silicon: Prices remained unchanged w-o-w at RMB 5,720-5,860/t ($799-818/t).
Market recap
Limited supply keeps FeSi market firm: The market witnessed cautious sentiment on the supply side, as well as among buyers. Supply was tight due to limited production increases, with sellers continuing to face cost pressures. Costs of semi-coke and electricity remained stable, though uncertainty persisted around future electricity pricing policies.
Steel slowdown caps FeSi demand: Spot market activity was influenced by steel mill bidding prices. The seasonal slowdown in the steel sector led to a slower pace of procurement, with some regions witnessing need-based purchases. Additionally, declining profitability in downstream sectors such as magnesium metal weakened ferro silicon demand.
Outlook
In the short term, Chinese ferro silicon prices may remain volatile with limited upward momentum due to weak supply-demand fundamentals. However, positive sentiment may emerge as steel demand picks up.
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