In February, under the condition of high supply, low demand, and low cost, the market price of ferrosilicon continued to fall, and the profit margin of factories was compressed. The market resumed after the Spring Festival, the recovery of downstream demand was slow, the inventory of ferrosilicon factories increased, and the price of electricity in production areas rose. However, after the resumption of imports of Australian coal, domestic coal prices fell. The transaction is deserted, and the market price of manufacturers is under pressure. At the end of the month, the mainstream market price is 72#7600-7800, 75#7900-8000 yuan/ton, which is 300-400 yuan/ton lower than that in January.
The following are the downstream consumption statistics of ferrosilicon in February
1. Crude steel
Crude steel production: 80.06 million tons
Consumption of ferrosilicon: 320,000 tons
According to data from the National Bureau of Statistics, from January to February 2023, China’s crude steel output was 168.7 million tons, an increase of 5.6% year-on-year; the national average daily output of crude steel from January to February was 2.859 million tons, a month-on-month increase of 13.8%.
From January to February 2023, China’s pig iron output was 144.26 million tons, a year-on-year increase of 7.3%; the average daily pig iron output from January to February was 2.445 million tons, a month-on-month increase of 9.8%.
From January to February 2023, China’s steel output was 206.23 million tons, a year-on-year increase of 3.6%; the average daily steel output from January to February was 3.495 million tons, a month-on-month decrease of 3.2%.
According to the 31st day in January and the 28th day in February, the crude steel output in January was 88.63 million tons, and the crude steel output in February was 80.06 million tons.
Crude steel is the main downstream consumable of ferrosilicon. The maximum consumption of ferrosilicon is about 4KG to produce one ton of crude steel. The consumption ratio of crude steel and ferrosilicon is about 1:0.004. From this, it can be calculated that the production-consumption of crude steel in February The total amount of ferrosilicon is about 320,000 tons.
2. Magnesium metal
Magnesium output: 71,732 tons
Consumption of ferrosilicon: 75,300 tons
Affected by sluggish demand and falling raw materials in February, the magnesium market showed a weak decline. At the end of the month, the mainstream market price was 21,200-21,300 yuan/ton in cash, down 600-700 yuan/ton from January. This month, the market has a short-term rise after the Alashan coal mine accident, but subject to the sluggish demand and rising social inventory, the price rise lacks support. It is expected that the price of magnesium ingots will remain weak in the near future.
According to website statistics, the national output of magnesium ingots in February was about 71,732 tons, an increase of 782 tons from the previous month. The average operating rate of magnesium ingots in China is about 52.16%, an increase of 2.16% from the previous month. There are a total of 54 factories in China this month, of which about 14 factories have reduced production.
As the main downstream market of 75# ferrosilicon, magnesium metal needs to consume 1.05 tons of ferrosilicon to produce one ton of magnesium metal. From this, it can be calculated that the total consumption of ferrosilicon by magnesium metal in February is about 75,300 tons.
3. Export
According to customs data, China exported 22,675.36 tons of ferrosilicon with a silicon content greater than 55% in February 2023, a decrease of 30,533.3 tons from January and a month-on-month decrease of 57.38%. Compared with 44247.892 tons in the same period last year, it decreased by 21572.532 tons, a year-on-year decrease of 48.75%. From January to February 2023, a total of 75,900 tons will be exported, a decrease of 36,800 tons compared with the same period last year.
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