[Ferro-Alloys.com]

The ferrosilicon market has been in a continuous downturn recently, and the Futures in the last week fell sharply below expectations. The market demand was poor, and it was difficult to conclude a deal. In the past month, many manufacturers in the production areas have shut down their furnaces, reduced production and guaranteed prices to save themselves. On the 20th, except for individual manufacturers, almost all the furnaces of ferrosilicon in Zhongwei area of Ningxia were shut down. The industry expected that the monthly ferrosilicon production may fall to about 480 thousand tons in July. The supply side moved down, and the reduction was obvious, and the contradiction between supply and demand has been eased in stages. This week, the rebound of Futures market has also reduced the impact on the spot market, but it was still unable to meet with the weak downstream demand, which was difficult to completely reverse the situation. The short-term ferrosilicon market would still run weakly in the short term. Pay attention to the Futures market and the trend of a new round of steel tender.

Downstream, according to the data of National Bureau of Statistics, in June 2022, the national production of crude steel was 90.73 million tons, a year-on-year decrease of 3.30%, and the daily output was 3.0243 million tons, a month on month decrease of 2.96%; From January to June, the country produced 527 million tons of crude steel, a year-on-year decrease of 6.50%, with a cumulative daily output of 2.9109 million tons. Since this year, the iron and steel industry has been facing the impact of generally weak demand, relatively high supply and slow inventory removal, which has led to the rapid decline in steel prices since April, and the loss of domestic steel mills has been expanding. Under the high temperature and rainy weather in July and August,  the traditional off-season, the loss may further expand. Confronted the severe and complex market situation, major steel mills have introduced countermeasures to reduce costs and increase efficiency to ensure effective operation. It was expected that the subsequent market would rebound to a certain extent under the background of gradual recovery of domestic demand and output pressure drop, and the profits of the steel industry were expected to recover.

Also affected by the continued downturn in demand, the domestic magnesium market has been falling for nearly two months, and the price this week hit a new low in 11 months. Although many factories have arranged maintenance, the output has decreased, but at the same time, the terminal consumption was also decreasing, the downstream procurement was cautious, the demand of price reduction was strong, the inventory burn of factories was slowly, the price continued to decline, and the market confidence was frustrated. It’s likely to continue to run in the weak consolidation in the short term. On Friday, the mainstream ex-factory cash quotation including tax of 99.9% magnesium ingots was about 23200-23500 yuan per ton.

The weekly opening price of 2209 main contract was 7,384, the highest price was 7,756, the lowest price was 7,218, the closing price was 7,622, the settlement price was 7,606, the trading volume was 794,041, and the position was 140,937, up 5.95%.

Below are ferrosilicon Futures main contract daily specific performances:

• [Editor:kangmingfei]