Ferrosilicon Review in September

Ferrosilicon Review in September: Supply and demand increase, and the market price of ferrosilicon rises

Ferrosilicon prices continued to rise in September. The rise in raw material blue carbon led to an increase in the cost of ferrosilicon, which was superimposed on the increase in downstream demand. Ferrosilicon rose slightly in the first and mid-term. In the latter half of the year, with the Ningxia epidemic and the advance purchase of steel mills before National Day, the price continued to rise. In the first half of the year, the raw material orchid charcoal rose slightly, with fewer factories operating, the stock of manufacturers fell, and the price of ferrosilicon factories rose slightly. In the middle of the year, the enthusiasm of factories to resume production increased, and factories in Ningxia, Inner Mongolia and other places resumed production one after another, the supply of ferrosilicon rebounded, and the market price remained stable. In the latter half of the year, the price of orchid charcoal rose again. COVID-19 in Ningxia affected the circulation of goods. Before the Chinese National Day, some steel mills entered the market in advance to purchase, and the ferrosilicon period is now rising significantly. At the end of the month, the mainstream market price of ferrosilicon naturally lumps is EXW72#7800-8000, 75#8400-8500 yuan/ton, an increase of 400 yuan/ton compared with August.

In September, ferrosilicon showed an upward trend, the increase was relatively moderate in the first and mid-term, and the market price rose significantly in the latter half of the year. At the end of the month, the mainstream market price is ferrosilicon 72#7800-8000, ferrosilicon 75#8400-8500 yuan/ton in cash, which is 400 yuan/ton higher than that in August.


The Output of Chinese Ferrosilicon in September

 The latest statistics show that in September, there were 82 ferrosilicon enterprises and 273 submerged arc furnaces in the country. The average operating rate of ferrosilicon in September was 57.66%, up 4.07% from August. The output is expected to be 434,500 tons, an increase of 26,600 tons from August and an increase of 8,500 tons from 426,000 tons in the same period in 2021. The cumulative output from January to September 2022 was 4,487,300 tons, a decrease of 51,610 tons from the same period in 2021.

Export Market of Ferro Silicon

According to customs data, China’s export volume of ferrosilicon with a silicon content greater than 55% in August 2022 was 41,854.584 tons, a decrease of 15,855.914 tons from July and a month-on-month decrease of 27.47%. Compared with 68827.706 tons in the same period of 21 years, it decreased by 26973.122 tons, a year-on-year decrease of 39.19%. From January to August 2022, a total of 498,200 tons were exported, an increase of 149,200 tons compared with the same period in 2021.

In August 2022, the export volume of ferrosilicon with a silicon content of ≤55% in China was 2160.8 tons, a decrease of 406.8 tons from July, a decrease of 15.84% from the previous month, an increase of 466.725 tons from 1694.075 tons in the same period in 2021, and a year-on-year increase of 27.55%.

Downstream Market of Ferro silicon

Ferrosilicon for magnesium metal: in September, magnesium ingots first fell and then rose slightly. At the beginning of the month, Shenmu was gradually unsealed. Manufacturers had a strong shipping mentality, and the downstream did not accept orders. The market price fell significantly, with a decline of 1500-2000 yuan / ton. In the middle of the export shipping schedule is approaching, export companies enter the market to purchase, the market transaction has improved, and the price is maintained at 24,000-24,300 yuan / ton in cash. In the latter half of the year, the prices of raw coal and ferrosilicon rose, and the cost of magnesium plants increased. In addition to stocking up before the festival, the quotation for magnesium plants was raised to 24,500-25,000 yuan/ton in cash. However, at the end of the month, downstream stocking was completed, market transactions weakened, and high quotations callback. At the end of the month, the mainstream market price was 24,500-24,600 yuan/ton in cash, down 1,600-1,700 yuan/ton from August.

Ferrosilicon for steel mills: In September, the scale of production resumption of steel mills expanded, and supply pressure appeared. The addition of factors such as interest rate hikes by the Federal Reserve and weakening external demand formed certain constraints on steel prices; Demand has improved to a certain extent, the average price of iron ore at the cost side has fallen, and the average price of coke has risen. The support and resilience are still there, forming support for the steel market. In September, the domestic steel market showed a volatile and rebounding trend.

Forecast for October Ferrosilicon Market

The profit of ferrosilicon was restored in September, the factory started to increase, and the output rebounded. It is expected that the output of ferrosilicon will continue to increase in October. The price of raw coal remains high, the temperature in the north is gradually getting colder, and the heating season is coming, it is difficult for the price of raw coal to drop significantly. Most of the ferrosilicon manufacturers can maintain the production of orders, and some of the supply sources are set to the disk, and the market spot is reduced. On the demand side, the supply of steel mills started to recover, but the profit of finished products contracted, and the start of construction at the end of the month fell. In October, the market expects that the broader market will still be affected by overseas interest rate hikes, but the performance of supply and demand is still the main focus.


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