In 2023, global economic growth faced slowing pressure.
In the first half of the year, domestic economic operations were under great pressure, end-use real estate was sluggish, people’s confidence was low and consumption declined, and the negative feedback from the end-point was transmitted to the upstream raw materials end.
The market price of ferrosilicon continued to fall in the first half of the year, profits narrowed significantly, supply declined, and demand was sluggish. The market showed a weak supply and demand situation in the first half of the year.
With the prices of raw materials blue carbon and iron oxide sheets falling.
The cost of ferrosilicon in the first half of 2023 dropped compared with the same period in 2022. According to ferroalloy online data,
In the first half of 2023, the production cost of ferrosilicon in Qinghai was 7,134 yuan/ton, a decrease of 443 yuan/ton from the same period in 22, and a year-on-year decrease of 5.85%; the production cost in Ningxia was 7,323 yuan/ton, a decrease of 641 yuan/ton from the same period in 22, and a year-on-year decrease of 7,323 yuan/ton. down 8.05%.
According to customs data, ferrosilicon exports totaled 647,200 tons in 2022, an increase of 122,100 tons compared with 2021.
The total exports from January to May 2023 were 186,900 tons, a decrease of 154,100 tons compared with the same period in 2022, and a year-on-year decrease of 45.19%.
Ferro Silicon Outlook on the Second Half of 2023 on the Chinese Market
Ferrosilicon Production forecast
Ferrosilicon production will decline
In 2023, both domestic and foreign economic operations were under great pressure. Domestic sales and foreign trade orders were compressed, real estate was sluggish, and the negative feedback of declining terminal demand gradually spread to the raw material side. In the first half of the year, the market price of ferrosilicon continued to fall, and manufacturers’ profits shrank. The start-up of ferrosilicon is adjusted by profits. The output in the first half of the year dropped significantly. In the second half of the year, new and replaced furnaces will be put into operation. From a full-year perspective, the output in 2023 will decrease compared with 2022. The output in 2023 is expected to be around 5.4 million tons.
Ferrosilicon production cost forecast
Ferro silicon production cost focus downwards
The majority of the cost of ferrosilicon is electricity, and the possibility of a significant decline in electricity is small. The market price of blue carbon has fallen, and the room for subsequent declines is expected to be limited. Silica prices are relatively stable. It is expected that the center of gravity of ferrosilicon costs will shift downward in the second half of the year, but the downward movement will not be significant.
Ferrosilicon Demand Forecast:
Both Supply and Demand Decline
Steelmills maintains a low inventory strategy for raw material procurement this year. Magnesium ingot has been shut down due to the rectification of Fugu Lan tan. Some magnesium plants have stopped production, and the demand for ferrosilicon has decreased. Exports have shrunk significantly this year. Casting is sluggish, and ferrosilicon production is expected to decline in 2023. , the overall supply and demand have declined, social inventories remain high, and supply and demand are expected to be loose.
Ferrosilicon Price Outlook for the Second Half of the Year
From a cost point of view, the cost focus of ferrosilicon has shifted downwards. From a supply point of view, ferrosilicon output will decrease in 2023. From a demand point of view, steel mills will remain stable with a slight decrease. Metal magnesium, exports and castings will all decline. The average price of ferrosilicon is expected to be higher in the second half of the year. The decline continued in the first half of the year, and price fluctuations narrowed.