Ferro silicon prices rose by RMB 150/t ($21/t) this week as the supply remained restricted and demand went up.
Increase in prices w-o-w:
- Grade 75% silicon: Prices increased by RMB 150/t ($21/t) to settle within a range of RMB 7,460-7,640/t ($1,034-$1,059/t) ex-works, including tax.
- Grade 72% silicon: Prices followed a similar trend, rising by RMB 150/t ($21/t) to establish a new range of RMB 7,020-7,210/t ($973-$999/t) ex-works, including tax.
Factors driving the ferro silicon market were:
Demand-supply disparity: The tight supply situation of ferro silicon remained unchanged. Most manufacturers prioritised order production amidst this supply shortage. Additionally, downstream demand has increased, contributing to a favourable actual transaction situation. Meanwhile, most manufacturers continued to prioritise order-based production.
Cautious approach by steel mills: Steel mills entered the market through bidding and procurement recently, the leading steel mills have been delaying the process of setting prices through bidding as they are facing challenge of finding low-price spot resources in the market. Transaction prices have been steadily increasing due to this scarcity.
The demand side of the ferro silicon market experienced an upturn, attributed to the resumption of production by steel plants, which has bolstered demand. As factories continued to destock their inventories, this trend further supports the improvement in demand.
Outlook
The current steel market competition has intensified, leading to a cautious overall sentiment among stakeholders. Given these dynamics, it is anticipated that ferro silicon prices will experience fluctuations in the short term as the market adjusts to changing supply and demand dynamics and responds to broader market conditions.
Note: This article has been written in accordance with an agreement between CBC and BigMint.