Chinese ferro silicon prices witness slight decline on bearish market atmosphere

Ferro silicon prices in China inched down by RMB 93/t ($13/t) this week as the overall market functions saw a bearish trend.

Prices inched down w-o-w:

Grade 75% silicon: Prices inched down by RMB 75/t ($12/t) to settle within a range of RMB 7,400-7,600/t ($1,020-$1,048/t) ex-works, including tax.

Grade 72% silicon: Prices followed a similar trend, inching down by RMB 110/t ($15/t) to establish a new range of RMB 7,000-7,200/t ($965-$993/t) ex-works, including tax.

Prices dip amidst environmental concerns: The recent slight drop in ferro silicon prices can be attributed to the ongoing push for energy-saving and carbon-reduction measures, which have cooled the market atmosphere. With the raw materials market showing poor performance, confidence among ferro silicon bulls has waned, leading to a bearish trading atmosphere.

Need-based purchases: Some traders seized the opportunity to purchase at low prices, but inventory consumption remained sluggish, only need-based buying happened. As a result, actual transaction prices loosened, and steel mills experienced lacklustre bidding volumes and price performance.

These factors collectively contribute to the current downturn in the ferro silicon market, highlighting the challenges faced by industry participants amid evolving regulatory and market dynamics. Despite this, stakeholders are likely monitoring the situation closely for potential shifts or opportunities in the market landscape.

Ferro silicon futures volatile: Trader sources said that, ferro silicon futures prices have fluctuated greatly recently, making it difficult to predict price trends. So, they will remain quite cautious while making decisions in the upcoming week.

China's Zhengzhou Commodity Exchange (ZCE) for September 2024 delivery of ferro silicon diminished by RMB 200/t ($26/t) w-o-w to RMB 7,102/t ($979/t) on 13 June, 2024 as against RMB 7,302/t ($1,007/t) on 6 June, 2024.

Dull stainless steel market: Weak demand for stainless steel as well as sliding stainless steel prices have also exerted pressure on ferro silicon prices.

Outlook

Ferro silicon prices are anticipated to witness slight fluctuations in the short term as current steel demand is rising, driven by the "buy high, not buy low" sentiment.

So, it is crucial to analyse the minimal to critical changes in the ferro silicon market to get more clarity regarding the near term outlook.

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