Chinese ferro silicon market remains firm even as market confidence weakens

CBC: Ferro silicon prices remained flat w-o-w on subdued market confidence, production cuts loom and shrinking margins.

Grade 72% silicon: Prices remained unaltered, with ex-factory, tax-inclusive quotes at RMB 6,130-6,320/tonne (t) ($856-882/t).

Grade 75% silicon: Prices were stable for this grade too, with quotes at RMB 6,590-6,780/t ($920-947/t).

Firm prices amid lower trades: Ferro silicon prices remain unchanged amid numerous inquiries but low trading volume. Market confidence has further weakened, and sentiment is subdued.

Narrowing profit margins: Manufacturers faced shrinking profit margins, while production areas report maintenance and production cuts. Combined with a high overall supply and fluctuations in the futures market, along with other negative factors, the outlook for the ferro silicon market remains bleak.

Ferro silicon futures inch up: On 7 October 2024, the Zhengzhou Commodity Exchange (ZCE) for January 2025 delivery of ferro silicon edged up by RMB 96/t ($13/t) w-o-w to RMB 6,464/t ($903/t) from RMB 6,560/t ($916/t) on 31 October 2024.

Outlook

With macroeconomic policies supporting recovery and rising costs, ferro silicon prices are expected to see a slight upward shift in a longer run. However, it is expected that the market will continue to consolidate in a weak position in the near future.