[Ferro-Alloys.com]

[Ferrosilicon Market] After coming back from the National Day holiday, the ferrosilicon spot market operated steadily under the support of the cost side (coke, electricity and transportation costs); The downstream steel mills still had obvious demand for stocking and replenishment. In October, the tender price of ferrosilicon in HBIS Group rose 650 CNY/T month on month to 8850 CNY/T, which greatly improved market confidence. The manufacturers had low willingness to sell at low prices and strong willingness to support prices. Enterprises in the production area continued to resume production, and the operating rate and daily output increased. In terms of Futures, on the first trading day (10th) in October, the main contract rose rapidly and sharply, but fell rapidly on the 11th, and the market fluctuated downward. On the demand side, due to the impact of the steel mills’ loss, limited production and maintenance, and some inventory after the recent replenishment, the demand has weakened in the short term. In later tender price of the steel mills was low, and the tender volume has shrunk. A steel mill in East China priced 8700 CNY/T, 150 CNY/T lower than the representative steel mill in the north, which has a certain impact on market confidence.

In the afternoon of Wednesday, 19th, a news that "Fugu area's semi-coke enterprises would start to stop production and dismantle 50% on the 25th" was fermented in the industry, driving the Ferrosilicon Futures 2211 contract up 1.04%, but no official document was issued. On Thursday, 20th, the Futures market fell again. The traditional "September-October" peak season  has ended, and 75 # ferrosilicon has remained relatively strong under the support of the magnesium metal market, while 72 # ferrosilicon has been weak due to the expectation of production reduction in downstream steel mills. The quotation has been slightly lowered, and the enthusiasm for the new round of tenders was poor. The market sentiment was gradually pessimistic, and the cautious attitude has been strengthened. The supply side was generally stable while the terminal demand was sluggish. Although the cost side coke and electricity costs were still supported, the rising pressure was still great, and it was expected that the operation would continue to be weak in the short term. Focus on the Futures market trend, changes in supply and demand, and the progress of tender in November.

[Futures Market] In October, the opening price of 2301 contract was 8,416, the highest price was 8,644, the lowest price was 7,678, the closing price was 7,786, the settlement price was 7,762, the trading volume was 2,108,930, and the position was 170,548, a decrease of 5.60%.

[Ferrosilicon Exports] According to data of China Customs, in September 2022, China exported 43248.486 tons of ferrosilicon (containing by weight more than 55% of silicon), a month on month decrease of 1393.902 tons, or 3.33%; The year-on-year decrease was 10665.916 tons, or 32.74%. (41854.584 tons were exported in August 2022; 32582.57 tons were exported in September 2021). In September 2022, China exported 2174.5 tons of ferrosilicon (containing by weight ≤55% of silicon), a decrease of 13.7 tons month on month and 18.6 tons year on year. (2160.8 tons were exported in August 2022; 2155.9 tons were exported in September 2021).

[Downstream Steel] In the fourth quarter, the Futures market declined, and the domestic steel market was in a weak operating state. The demand for steel was decreasing, especially in the North. The enthusiasm of downstream procurement was poor. The price of raw materials was high, and the price of finished products was falling. The loss of steel mills was expanding. The daily output of crude steel was falling back, and it was expected that the production reduction of steel would increase in the later period. Under the situation of weak supply and demand, the market sentiment was pessimistic. However, in recent months, major projects have also been intensively started in many parts of the country, so as to strengthen the efforts to make up for weaknesses. At the third quarter information conference of China Iron and Steel Association held on October 31, Wang Yingsheng, chief economist of CISA, pointed out that the demand for steel in the real estate and construction industries was recovering; In addition, in the near future, the potential of the infrastructure industry was obvious, and the demand for steel in the short and medium term would rise slowly; The implementation of a series of policies proposed in the report of the 20th National Congress of the Communist Party of China would bring huge steel demand space in the medium and long term.

[Downstream Magnesium] In the first week after the National Day, under the influence of factors as the cost end support of ferrosilicon and coal and the rising transportation costs, the price of magnesium ingot rose, and the quotation was gradually raised from 24600 CNY/T to 25000 CNY/T. But the overall demand was weak, and the acceptance of high prices was still low, and the magnesium price subsequently fell back slightly; On Wednesday, 19th, influenced by the news of the production reduction of Fugu's semi-coke transformation, the number of inquiries and purchases increased. The factory side, affected by the cost support and the uncertainty of the information, had a strong price holding mentality, and the magnesium price quickly rose to about 25500 CNY/T; However, the downstream demand was insufficient after all. The magnesium price then fell back under pressure again. The downstream mainly purchased according to demand on a small amount, and the orders were few. The pressure of supply exceeding demand remained, and the mood was not very optimistic. On 31st, the mainstream ex-factory cash quotation including tax of 99.9% magnesium ingots was about 24400-24500 CNY/T.

Domestic Steel Mills Tender Prices – Oct, 2022

• [Editor:kangmingfei]