Ferrosilicon Market Report – Early June: Quiet Market Amid Rising Output and Weak Demand

Ferrosilicon Market Report – Early June: Quiet Market Amid Rising Output and Weak Demand

As June begins, the ferrosilicon market remains quiet with no signs of recovery. On the macroeconomic front, the U.S. government’s recent announcement to raise steel import tariffs from 25% to 50% starting June 4th has reinforced a bearish sentiment across the ferrous futures market. This negative outlook continues to pressure both futures and spot markets.

On the spot side, production activity in Ningxia has resumed at several plants, leading to an increase in daily output. Despite this, supportive factors for ferrosilicon prices are lacking, and futures prices continue to slump. Many producers have become inactive in offering quotations, citing little benefit in doing so amid the weak demand. A number of producers have even adopted a wait-and-see approach.

For those still active in the market, EXW prices are roughly:

• Ferrosilicon 72% natural lump: 5,100–5,200 CNY/ton (cash)
• Ferrosilicon 75% natural lump: 5,700–5,800 CNY/ton (cash)

Production Update

In terms of electricity pricing, May's rates have been gradually confirmed:

• Ningxia: 0.37–0.41 CNY/kWh
• Qinghai: Pricing yet to be finalized

Despite some production cuts at a major plant in Inner Mongolia, resumed operations in Ningxia and Shaanxi have driven a week-on-week increase of 805 tons in daily output. The current daily production level now stands at 13,577 tons, indicating an upward trend despite the market downturn.

Downstream Market: Magnesium Slips Further

The magnesium market continues to show weakness. As of today, the EXW price in Shaanxi stands at 16,500–16,600 CNY/ton, down 100 CNY/ton compared to previous levels. Downstream demand remains sluggish, with few new orders and a clear lack of market confidence. While producers are actively trying to sell, the persistent downward price trend keeps buyers hesitant.

Outlook: Uncertainty Ahead

The ferrosilicon futures price has now fallen below the production cost, but output continues to rise. As losses mount, many plants are operating in the red. The market is watching closely for any signs of production cuts or shifts in strategy in the coming period, which could eventually restore some balance between supply and demand.