China's ferro silicon prices fall on weak demand

Chinese ferrosilicon (FeSi) prices lost some ground over May 10-17, with dull demand from end-users and bearish sentiment in the market being blamed for the drop.
As of May 17, the domestic price of 75% grade FeSi under Mysteel's assessment had fallen by Yuan 54/tonne ($7.7/t) from one week earlier to reach Yuan 7,186/t including the 13% VAT.

Some steelmakers tended to cut their offering prices for FeSi after noting the decline in bidding prices from Hebei Iron & Steel (HBIS), a leading steel producer headquartered in North China's Hebei. The bidding price that HBIS had tabled for the ferroalloy for May delivery was lower by Yuan 300/t on month at Yuan 7,580/t including the 13% VAT, according to Mysteel's survey.

FeSi production is hovering at a low level, as many FeSi smelters have trimmed or even halted production to avoid further losses, a Shanghai-based analyst said. However, some smelters have resumed production, believing they could still earn some profit when selling their output.

Over May 5-11, daily FeSi production among the 136 Chinese smelters under Mysteel's tracking hovered low at 13,715 tonnes/day on average, despite an on-week rise of 430 t/d. The surveyed smelters account for 95% of the country's total.

Many steelmakers were cautious about buying FeSi, given the limited steel orders at hand, while many traders were unwilling to procure the ferroalloy for fear that prices will decline further, he added.

The stocks held by smelters continued to mount during the week, mainly due to the dull demand from end-users. Mysteel's bi-weekly survey among the 60 Chinese independent FeSi smelters which host about 80% of the country's FeSi smelting capacity showed that since April 28, their total stocks had swollen by 5,600 tonnes to reach 80,900 tonnes as of May 12.

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