China's Sept FeSi output grows further to 9-month high

Production of Ferro Silicon across China climbed for a third straight month in September to reach 487,300 tonnes, refreshing a new high since the record of 504,800 tonnes was set in December 2018, according to Mysteel's latest survey among 128 major smelters.

Within last month's total production, output in Northwest China's Ningxia Hui Autonomous Region and North China's Inner Mongolia Autonomous Region marked the largest month-on-month increases, with their output rising by 9.7% and 5.8% respectively. Their combined production grew by about 17,900 tonnes compared with August, Mysteel Global notes.

The findings showed that among all 128 sampled producers, total output in September was 7,600 tonnes or 1.6% higher than that in August, showing that the domestic FeSi smelters were reluctant to cut the production on their own initiative, even though FeSi prices in the domestic market continued to soften last month. The 128 plants under Mysteel's monthly survey own almost all of China's FeSi capacity.

"For the time being, the profit margins of domestic FeSi smelters are already very thin - thanks to the further decrease in (FeSi) prices - but the smelters have not cut production as they can still make a profit," observed a Mysteel analyst in Shanghai responsible for the survey.

Mysteel's data showed that as of September 30, the domestic price of 75% grade FeSi reached Yuan 5,639/tonne ($793/t), slipping by another Yuan 30/t from one month before.

Domestic FeSi prices will still face great pressure in the coming term as demand from steel mills is seen shrinking significantly this month. At the same time, as steel producers have relatively adequate supplies of the ferroalloy for the moment, they're also trying to lower their bid prices, Mysteel Global learned.

The bid volume for FeSi tabled by Hebei Iron and Steel Group (HBIS) in North China's Hebei province, for instance, was reported at 2,860 tonnes for this month, lower by 1,190 tonnes from that in September, another Mysteel survey showed. The mill's bid price for October procurement was also some Yuan 30/t lower month on month.