China: Ferro silicon market faces headwinds amid low trading volume, shrinking profit margins

CBC: Prices of Chinese ferro silicon inched down w-o-w on lowered market confidence.

Grade 72% silicon: Prices stayed stable with ex-factory, tax-inclusive quotes ranging from RMB 6,100-6,300/tonne (t) ($ 858-886/t).

Grade 75% silicon: Prices inched down by RMB 100/t ($14/t) for this grade, with quotes at RMB 6,620-6,800/t (USD 931-956/t).

Production plummets amid slow sales: Manufacturers from the key areas have halted their productions and few have gone under temporary shut downs due to dull demand and hampered profit margins. Meanwhile, the market sentiment remained subdued, and confidence continued to erode.

Surplus supply putting more pressure on market: The market was under additional pressure from oversupply and a downtrend in the futures market. Due to these negative factors, the ferro silicon market is expected to remain weak and consolidate at lower levels in the near term.

Ferro silicon futures largely stable: On 28 August, 2024, the Zhengzhou Commodity Exchange (ZCE) for October 2024 delivery of ferro silicon remained largely stable, with a slight increase of RMB 92/t ($13/t) w-o-w, to RMB 6,420/t ($903/t) from RMB 6,328/t ($890/t) on 22 August.

Outlook

Chinese ferro silicon prices may experience fluctuations driven by market sentiment and speculative behaviour at times. However, a significant increase in ferro silicon prices in the short term remains unlikely.