The ferro silicon prices surged by RMB 225/t ($31/t) this week. This can be attributed to a sharp rise in raw material prices and an improved trade. Factors that lifted the market were:
Increase in prices w-o-w:
- Grade 75% silicon: Prices increased by RMB 250/t ($35/t) to settle within a range of RMB 7,210-7,390/t ($996-$1,021/t) ex-works, including tax.
- Grade 72% silicon: Prices followed a similar trend, rising by RMB 200/t ($28/t) to establish a new range of RMB 6,770-6,960/t ($935-$961/t) ex-works, including tax.
Uptick in raw material prices: The increase in the prices of raw material added to the upward pressure on costs, which likely contributed to the overall rise in ferro silicon prices.
However, the resistance to buying goods at low prices reflected that buyers were wary of accepting higher prices too quickly. This could lead to a stalemate between buyers and sellers as both sides negotiate to find a price point that works for them.
Strong market demand: It appeared that the ferro silicon market experienced some interesting dynamics. With the spot price rising and a new round of bidding finalised for major steel plants, it suggested strong demand in the industry.
Optimistic market environment: The improvement in market demand, coupled with tight spot supply and companies prioritising production orders, indicated a healthy market environment. The positive news within the industry has also contributed to an improved mindset among stakeholders.
Outlook:
Overall, the ferro silicon market is expected to remain robust in the near future, the presence of high inventory levels suggests that any continued price rise may be somewhat constrained.
It will be important for industry players to closely monitor market dynamics and adjust their strategies accordingly to navigate these conditions effectively.
Note: This article has been written in accordance with an agreement between CBC and BigMint.