Chinese ferro silicon prices remain firm even as demand-supply imbalance prevails

Ferro silicon prices in China remained stable even amid demand-supply mismatch. Below are highlights from the market:

Steady prices:

• 75% silicon content: Prices stayed firm this week reaching RMB 6,820-7,000/t ($948-$973/t) ex-works, including tax.
  
  
• 72% silicon content: Prices were constant this week, settling in the range of RMB 6,480-6,680/t ($901-$929/t) ex-works, including tax.
  
  

Demand-supply imbalance: Tough negotiations played a crucial role in price stability this week as buyers were hesitant in accepting higher quotes, while sellers were not interested in lowering prices.

Market seeks policy support: The ferro silicon market needs favourable policy stimulus, especially with major meetings taking place. Downstream steel bidding prices and magnesium metal prices showed a downward trend, with attention drawn to Hegang's pricing situation.

Notably, magnesium metal fell below the comprehensive cost, and there may be maintenance conducted by companies after raw material inventory is consumed.

Downstream demand slump: Decreased downstream demand and reduced bidding prices from steel mills have impacted the market. Nevertheless, the slight uptick in Shanghai nickel and stainless steel futures has provided a boost.

Outlook

As per BigMint's analysis, in the short term, fluctuations are expected to dominate the ferro silicon market even as the stainless steel market remains dull. Weak spot prices and uncertain bidding prices are set to impact the market.

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