- Weaker semi-coke prices ease cost support
- Producer losses limit scope for price declines
China’s ferro silicon market remained stable w-o-w, with Si:75% prices at RMB 6,160-6,340/t ($922-949/t) exw, inclusive of taxes and acceptance. Si:72% prices also held steady w-o-w at RMB 5,650-5,850/t ($846-876/t) exw.
Market activity remained subdued as weaker semi-coke prices eased production cost support, while expectations of lower electricity costs limited the scope for price increases. Steel mills continued to buy mainly as needed and pushed for lower prices in tenders. Meanwhile, high operating rates and slightly rising producer inventories added to supply pressure. However, losses or narrow profit margins among producers in major production areas helped limit the downside.
Market updates
Easing raw material and electricity costs weigh on prices: Semi-coke prices weakened, reducing support for ferro silicon production costs. Meetings on supply security and capacity expansion in several regions also raised expectations of lower electricity costs, further weakening the case for higher prices. If coal and electricity costs fall further, prices could come under additional downward pressure.
High supply meets cautious steel mill demand: Operating rates remained high and producer inventories increased slightly, despite production cuts and maintenance in some major producing areas. Other regions still have room to raise output. Meanwhile, steel mills facing profit pressure continued to limit purchases to immediate needs and push for lower prices through bidding. Potentially better demand for non-steel uses, including magnesium ingots and stainless steel, may offer some support.
Outlook
Ferro silicon prices are likely to remain weak within a narrow range in the short term. Lower energy costs and ample supply may weigh on prices, while producer losses could limit sharper declines. Semi-coke and electricity prices, along with steel mills’ procurement plans, will be key factors to watch.
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