WEEKLY: China Ferro Silicon Prices Slip Further to a 33-Month Low

Chinese Ferro Silicon prices have continued to soften over the past three weeks, with the price index of 75% grade, Ferro Silicon slipping to Yuan 5,406/MT (USD 772/MT) as of March 17, the lowest after the record of Yuan 5,400/MT reached on June 21 2017, according to Mysteel's database. Blamed for the slide is a bearish sentiment from the high levels of stocks in the domestic spot market.

The price decline represented another week-on-week decrease of Yuan 74/MT, as "many domestic smelters preferred to make some concessions in their selling prices to reduce their inventory levels in their yards and gain some cash flow," an industry-observer in Shanghai commented.

Mysteel's latest weekly survey showed that some Ferro Silicon smelters in Northwest China's Ningxia Hui Autonomous Region reopened their smelting furnaces recently after completing maintenance.

Thus, the production of the ferroalloy among the country's 128 major Ferro Silicon producers reversed up during the March 6-12 week, with the tonnage averaging 14,619 MT/day, higher by 285 MT/day from the previous week. The 128 plants under Mysteel's monthly survey covers almost all of China's Ferro Silicon capacity, Mysteel Global notes.

However, "transactions in the domestic Ferro Silicon market have not seen any significant improvement so far, and the stocks (in smelters' yards) have been accumulating," the Shanghai-based market source noted, adding that the sharp fall in steelmakers' bidding prices aggravated the pessimism in the domestic market and added more pressure to Chinese Ferro Silicon prices in the near term.

For example, the bidding price of Hebei Iron and Steel Group, a leading Ferro Silicon buyer in North China's Hebei province, saw a sharp decline of Yuan 1,050/MT on month to Yuan 5,850/MT for March procurement, though its purchasing volume for this month increased by 1,223 MT from last month to 2,273 MT, Mysteel's survey showed.

Market participants expressed concern about the Ferro Silicon market in the coming term, pointing out that it would be hard for domestic Ferro Silicon prices to see a substantial improvement with the high stocks in smelters' yards when output is increasing.

(This article has been published under the article exchange agreement between SteelMint Research and Mysteel Global.)