Ferrosilicon January review: the transaction atmosphere is deserted, and the market price drops slightly
Ferrosilicon fell slightly in January. In the first ten days of the year, downstream users completed stocking one after another. The atmosphere of market transactions gradually weakened. Some manufacturers began to accumulate inventory. Affected by favorable macro policies, the performance of futures is relatively strong. The market resumed at the end of the month, and the market transaction has not yet resumed. The futures market has risen sharply and fell back sharply. The downstream is in a wait-and-see situation. The mainstream price is 72#7900-8000, 75#8300-8500 yuan/ton cash natural block factory, which is 50- 150 yuan/ton.
1. This month’s market review of ferrosilicon
1.1 Raw material
The ex-factory price of silica in Qinghai and Ningxia is 200-260 yuan/ton, and the price varies with the distance between factories. Shenfu blue charcoal small material is 1520-1750 yuan/ton at the beginning of the month, and 1500-1700 yuan/ton at the end of the month. The 70# iron oxide sheet in Shijiazhuang, Hebei Province was 1020-1050 yuan/ton at the beginning of the month without a ticket, and fell to 900-930 yuan/ton at the end of the month, a drop of 120 yuan/ton.
1.2. Ferrosilicon spot market
Ferrosilicon fell slightly in January. In the first ten days of the year, the stocking was completed one after another, and the market was weak and stable. The market is basically closed in the middle of the month, the transaction is deserted, and the price is slightly loose. At the end of the month, when the market resumed, the futures market fell significantly, and the spot transaction has not yet resumed, and the market mostly adopts a wait-and-see attitude.
Specifically: in the first ten days of the year, downstream manufacturers completed stocking up one after another, and the market transaction atmosphere began to weaken, with scattered and small orders mainly. In the middle of the month, as the Spring Festival approached, logistics gradually decreased, and market transactions became more deserted. Some factories began to accumulate inventory, and prices continued to loosen. The mainstream was 72#7850-8000 and 75#8400-8500 yuan/ton. Fall 50-100 yuan / ton. The market resumed after the festival at the end of the month. The opening of futures on the first day showed a sharp rise and a drop. Spot transactions have not yet resumed. There are scattered small orders in the market. Manufacturers’ quotations remain mainly before the festival, and there is little change for the time being.
1.3. Export market
According to customs data, in December 2022 China’s exports of ferrosilicon with a silicon content greater than 55% were 35,034.82 tons, an increase of 860.636 tons from November and a month-on-month increase of 2.52%. Compared with 59489.628 tons in the same period of 21 years, it decreased by 24454.8 tons, a year-on-year decrease of 41.11%. In 2022, the cumulative export will be 647,200 tons, an increase of 122,100 tons compared with 2021.
In December 2022, China’s export volume of ferrosilicon with silicon content ≤ 55% was 2765.3 tons, a decrease of 132.014 tons from November, a decrease of 4.56% from the previous month, an increase of 1271.3 tons from 1494 tons in the same period of 21 years, and a year-on-year increase of 85.09%.
1.4. Bidding for steel mills in February
After the festival, the market resumed. In February, steel invitations were launched one after another. Hengyang Iron and Steel set a price of 8,680 yuan/ton. Kunming Iron and Steel issued a bidding document that has not yet been priced, which means that steel enterprises have not entered the bidding yet.
2. The downstream market of ferrosilicon
In terms of metal magnesium: in January, magnesium ingots rose slightly by 300 yuan/ton, and the output continued to shrink. In the first half of the year, affected by the release of the epidemic and the Spring Festival holiday, downstream customers had a strong atmosphere of closing the market, and the transactions were average. After the resumption of the market in the second half of the year, the market operation has not yet entered the right track, and downstream users are more cautious in purchasing, mainly inquiring, and the quotations of factories are firm. The recent magnesium price may be stable and relatively strong.
3. Forecast for next month of ferrosilicon
The ferrosilicon Ningxia region continued to increase furnaces, and the supply continued to increase. The demand-side magnesium plants and exports have not yet resumed, and the daily crude steel production of steel mills has begun to pick up. Affected by the Spring Festival holiday, manufacturers who resumed the market after the holiday have different degrees of stock in hand. In February, the market will be in a state of gradual recovery in demand and inventory consumption by silicon factories.