Factors Affecting the Price of Silicon Manganese and Ferrosilicon

Macroeconomic trend: Silicon Manganese and ferrosilicon are important raw materials for the steel industry, and the macroeconomic trend will inevitably affect the steel industry’s demand for them, which in turn will affect the price of ferroalloys.

Silicon Manganese Lump

Profit in the steel industry: The downstream of Silicon Manganese and ferrosilicon basically comes from the steel industry. The profit of steel affects the operation of steel mills, which in turn affects the demand for raw materials and affects the price of ferroalloys. In particular, the monthly bidding and procurement of iron and steel enterprises is the main pricing model for domestic ferroalloys. Iron and steel enterprises occupy a dominant position in the ferroalloy market. The ferroalloy industry has excess capacity and a large number of enterprises, so they are often forced to accept the prices locked by iron and steel enterprises. The willingness of steel mills to bid for silicon manganese and ferrosilicon is directly affected by steel profits.

Fluctuation in demand: In addition to systematic changes in demand for ferroalloys caused by changes in steel profits, pricing mechanisms, and seasonal production factors will also affect steel mills’ demand for Silicon Manganese and ferrosilicon. In terms of the pricing mechanism, since iron and steel enterprises implement centralized procurement at a specific time every month, demand will drop during non-purchasing hours, and prices will be affected by short-term fluctuations. The production seasonality of the steel mill itself will also lead to fluctuations in demand. For example, during the traditional Spring Festival, steel mills generally choose to concentrate on replenishment to increase the demand for ferroalloys in the short term. Production also leads to a significant decline in demand for raw materials in winter.


Cost situation: Since Silicon Manganese and ferrosilicon are in a relatively weak position in the industrial chain, and the output changes rapidly, they generally maintain a low-to-medium profit level, and changes in their own costs have an impact on prices. Among them, the cost structure of Silicon Manganese and ferrosilicon has certain differences. Among them, the main cost of Silicon Manganese is the cost of manganese ore, accounting for about 50%-60%, while the main cost of ferrosilicon is electricity cost, accounting for about 50%, while the cost of raw materials accounts for a small proportion. Due to the small fluctuations in electricity costs, generally, the price of manganese ore fluctuates greatly, resulting in a much higher fluctuation in the cost of manganese and silicon than that of ferrosilicon.

Import and export policy: Silicon Manganese and ferrosilicon, as typical “two high and one capital” industries, are restrained in export policies. The current export tariffs on silicon manganese and ferrosilicon are 20% and 25% respectively, resulting in almost no export of silicon manganese and a small amount of export of ferrosilicon. From a global perspective, the price of ferrosilicon in China is in a depression and it is difficult for other countries to replace it in a short period of time. Changes in export policies may have a more important impact on the demand for ferrosilicon.


If you have any questions, please leave your contact information and we will reply to you as soon as possible.

Send Inquiry Send Email Whatsapp