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Ferrosilicon Price Analysis In March 2024

In March, due to the combined effects of factors such as the continued decline of blue carbon, the decline in steel bidding prices, the sharp decline in magnesium prices, the decline in steel plant output, the increase in silicon plant maintenance, and the sluggish demand performance, ferrosilicon futures continued to fall, and the spot price gradually dropped. to the 6,000 mark, setting a new low in the past four years. The attitude of downstream operations is cautious. They just need to purchase and are unwilling to stock up. The market liquidity is poor. At the end of the month, the mainstream market prices of 72# 6050-6150 and 75# 6300-6400 yuan/ton cash natural block ex-factory were 200-600 yuan/ton lower than in February, with 75# having a larger decline.

Market review this month

1. Raw materials 

The factory-delivered price of silica in Qinghai and Ningxia is 180-240 yuan/ton. There are price differences depending on the transportation distance of each factory. The price of Shenfu Lantan small material was 930-970 yuan/ton at the beginning of the month and 710-750 yuan/ton at the end of the month, down 220 yuan/ton. The price of 70# oxide iron sheet in Shijiazhuang, Hebei Province was 1,000-1,030 yuan/ton at the beginning of the month without ticket, and at 940-970 yuan/ton at the end of the month, down 60 yuan/ton.

2. Ferrosilicon spot market

Ferrosilicon continued to decline in March. At the end of the month, the mainstream market prices of 72#6050-6150 and 75#6300-6400 yuan/ton were shipped in cash, which was 200-600 yuan/ton lower than in February.

Specifically: in the first half of the year, the raw material blue carbon continued to fall, and the cost center of gravity shifted downwards; second, the recovery of downstream demand was slow, traders were cautious, and market transactions were average; third, the price of magnesium metal continued to fall, and ferrosilicon was under pressure to decline. The market price is 72# 6100-6300, 75# 6700-6800 yuan/ton in cash and the natural block leaves the factory. 75# has dropped 100-150 yuan/ton from the beginning of the month. In the middle of the year, firstly, the black resonance drove the ferrosilicon market downward; secondly, the raw materials blue carbon and oxide scale continued to fall, and the cost dropped; thirdly, the downstream steel and magnesium prices fell, the downstream manufacturers were negative in purchasing, the overall market operation lacked confidence, and traders were unwilling Stocks are in stock, and purchases are just needed. Although the ferrosilicon plant has increased maintenance, it is still difficult to change the downward trend. In the middle of the year, 72#6050-6250 and 75#6650-6750 yuan/ton were shipped in cash, falling by 50-100 yuan/ton. The futures continued to fall in the second half of the year, the market sentiment was pessimistic, silicon plant shutdowns continued to increase, and output continued to decline. The market price at the end of the month was 72#6050-6150, 75#6300-6400 yuan/ton cash natural block was shipped, and 75# fell 350 yuan/ton.

In terms of output this month: The latest statistics show that there were 69 ferrosilicon-producing companies nationwide in March, with 235 submersible furnaces in production. The overall average operating rate of ferrosilicon in March was 49.25%, a decrease of 4.01% from February. The output is expected to be 423,800 tons, a decrease of 15,400 tons from February and a decrease of 40,500 tons from the same period last year. The cumulative output from January to March 2024 was 1.3335 million tons, a decrease of 128,000 tons compared with the same period last year.
In terms of construction starts this month: Inner Mongolia Baotou Shenghua has one 97 silicon to ferrosilicon converter and one Everbright has short-term maintenance. Gansu Tengda overhauled 2 units and Chuangyi overhauled 1 unit. Qinghai Yehua resumed production during the mid- to late-month maintenance period at the beginning of the month, and Shengji overhauled one unit at the end of the month. Ningxia Sanyuan overhauled half of its units, Maoye overhauled two units at the end of the month, Hefa stopped production at the end of the month, and Haoyue overhauled one unit. Shaanxi Fugu Jinleiyuan stopped production in the early ten days, Fugu Qianxin stopped production in the middle, Shenmu Minfeng stopped production in the middle, Longhua stopped one unit for maintenance at the end of the month, Jingli Chemical resumed production after short-term maintenance in the middle, and Xingyiyuan stopped production in the middle to late. Sichuan Yuefa resumed production of 1 unit at the end of the month.

3. Import and export market

According to customs data, China’s export volume of ferrosilicon with silicon content greater than 55% in February 2024 was 37,796.245 tons, an increase of 973.2 tons from January and a month-on-month increase of 2.64%. An increase of 15,120.885 tons compared with the same period last year, a year-on-year increase of 66.68%. The total exports from January to February 2024 were 74,600 tons, a decrease of 1,300 tons compared with the same period last year.

In February 2024, China’s export volume of ferrosilicon with silicon content ≤55% was 1032.6 tons, a decrease of 1254.5 tons from January and a month-on-month decrease of 54.85%. A decrease of 674 tons compared with the same period last year, a year-on-year decrease of 39.49%.

In terms of imports: China’s import volume of ferrosilicon with silicon content greater than 55% in February 2024 was 460.35 tons, a decrease of 3181.9 tons from January and a month-on-month decrease of 87.36%. The main importing countries are: North Korea 224.7, Russia 168 (tons).

Downstream market

In terms of magnesium metal: Magnesium ingots fell first and then rose in March. Market transactions were sluggish in the first and middle of the month, raw materials continued to fall, and downstream price pressures were obvious. Magnesium factory quotes fell all the way, with the lowest price falling to 17,200 yuan/ton. When the price fell to the 17,000 mark, downstream inquiries and transactions increased. The confidence of magnesium plants was slightly restored and they were reluctant to sell at low prices. Coupled with the maintenance of magnesium plants, the magnesium price gradually rose to 18,100 yuan/ton, but it was still 1,000 yuan lower than at the end of February.

Forecast for next month

From a cost perspective, with the price of blue carbon falling, the cost focus of ferrosilicon has shifted downwards, and we will pay attention to the electricity price situation in the future. From the perspective of supply, factory maintenance increased and output continued to decline. The output in March was 423,800 tons. It is expected that output will continue to decline in April. From the demand side, the output of crude steel and magnesium ingots has declined slightly, and the export volume has remained at around 30,000 tons. The supply and demand can be maintained in balance according to the data. However, the liquidity of the ferrosilicon market is poor, and downstream manufacturers are unwilling to stock up. In the early stage, It will take time for inventory to be consumed. In April, attention will be paid to changes in factory operations, and the market price is expected to be weak and stable.

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