China's ferro silicon market inch down amid a drop in inquiries

The prices of ferro silicon in China dropped down this week with a minor fluctuation in prices that inched down by RMB 20/t ($3/t). Domestic ferro silicon (Si:72%) hovered around RMB 6,830-7,030/t ($933-961/t). The pricing of ferro silicon (Si:75%) was stable at RMB 7,230 to 7,430/t ($988-$1015/t). All listed prices include tax and are ex works.

The prices for ferro silicon decreased, the spot market prices stayed muted and futures market for ferro silicon also worked dull. This has affected the profits of steel companies that use ferrosilicon, so they reduced their production. Because of this, the trades also went down and the overall market was deserted.

Factors affecting prices

1. Production curtailment and maintenance: Companies in Shaanxi and Ningxia have had to stop production for maintenance as they were under pressure of shipping and high costs. This has squeezed the profits of companies, on the contrary there are some companies that have planned to purchase ferro silicon, but they have not decided on the prices yet.

2. Deserted inquiries: The overall market sentiments stayed pessimistic that impacted the pace of transactions and inquiries going down. News of production cuts and maintenance also slowed down the market inquiries.

Outlook

The market participants believes that the prices won't drop much more because the costs of producing ferro silicon are still high. So, it is anticipated that the ferro silicon prices in near future would stay largely stable.

Note: This article has been written in accordance with an agreement between CBC and SteelMint.