Prices of Ferrosilicon in China Fell

Although most ferrosilicon producers reduced their inventories, prices continued to fall this week as downstream demand declined. At present, the mainstream price of 72%min and 75%min of ferrosilicon in the Chinese market is respectively 5,450-5,650 yuan/ton ex-factory cash and 5,700-5,900 yuan/ton ex-factory cash, down 50 yuan/ton from the beginning of this week. Due to weak demand, industry insiders think the next week China's ferrosilicon prices due to higher production costs and ease.

A trader in ningxia said he bought 600 tons of ferrosilicon from a local supplier at a 30-day acceptance price of 5,550 yuan per ton, down 50 yuan per ton from the supplier's base price at the beginning of last week. "Although most producers in ningxia lost about 30 percent of their regular output in October due to the low consumption season, they can accept a counter-offer of 50 yuan per ton this week," the trader said on Thursday. His last purchase was two weeks ago. He purchased 400 tons at the price of 5,600 yuan/ton 30 days acceptance. More than half of his steel customers have either delayed purchases until early November or reduced purchases in November as a result of the policy. He said most manufacturers' production cost is above 5,400 yuan/ton of ex-factory cash, and he thinks the price of ferrosilicon will be eased in the next week due to the demand reduction of 72%. The trader, which sells 2,000 tonnes of ferrosilicon a month and 1,600 tonnes in October, is expected to sell 1,000 tonnes in October due to reduced demand from steel mills and has no inventory. The trader sold about 25,000 tons of ferrosilicon in 2018 and about 18,000 tons in the first 10 months of this year.

Shanxi magnesium factory said it purchased 300 tons of ferrosilicon 75%min from ningxia at a price of 5,900 yuan per ton (shipping cost: 200 yuan per ton), down 50 yuan per ton from the supplier's base price at the beginning of last week. "My last purchase was made two weeks ago from this same supplier at a price of 5,950 yuan per ton," the consumer said. More than half of his suppliers in ningxia and Inner Mongolia were able to accept counter-offers of 50 yuan per ton this week as demand from steel mills weakened and the market became bearish. He said that the production cost of ferrosilicon producers without power plants is more than 5,600 yuan/ton of ex-factory cash, he thinks the next week due to weak demand for 75% of the price of ferrosilicon will ease.

The consumer has an annual capacity of 14,000 tons of si-fe and consumed 800 tons in October. Due to weak demand, sales are expected to drop to 600 tons in November. The consumer consumed about 12,000 tons of ferrosilicon in 2018 and about 9,000 tons in the first 10 months of this year.