Ferrosilicon Price in the Chinese Market In 2022 & Price Analysis

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Current Price of Ferro Silicon

Ferroalloy online (12th July 2022) ferrosilicon price: FeSi72:¥7700-7900, FeSi75¥8400-8600/ ton (EXW natural block ), FeSi75 has fallen significantly in the recent period. The market trading volume has shrunk, and part of some manufacturers have lost money. Manufacturers have stock in hand and reduce production to avoid losses.

FeSi ManufacturerFurnace Shut Down (KVA)Output Reduce (ton/day)
Zhongwei-ZT2*33000160
Zhongwei-DY1*3300080
Zhongwei-YX1*2550080
Zhongwei-YH1*45000120
Ningxia-RZL2*40500,  1*16500220
Tengda-XBT1*30000,  2*12500165
Qinghai-HLY2*1250065
Qinghai-JF2*25500100
Qinghai-FX2*18500100
Fugu-QX1*40500100
Total 1190
Furnace shutdown of ferrosilicon from June 30 to July 13

With the decline of ferrosilicon price, the trading volume of ferrosilicon declines obviously. The manufacturer is still mainly to sell inventory in the near future.

Downstream magnesium factory: the market resumed this week, magnesium ingot price is at ¥24500-24600/ ton.  The downstream demand is general.  Due to the FeSi75 price drop, magnesium ingot cost support turns weak. It has nearly ten magnesium manufacturers shut down and repairing equipment.

What are the main factors affecting the price of Ferrosilicon?

The price of ferrosilicon is influenced by many factors: raw materials, downstream demand, production capacity, epidemic policies, etc.

1. Raw material costs

Ferrosilicon is an alloy composed of iron and silicon. It takes coke, steel scrap, and silica as raw materials smelting in the electric furnace. Therefore, the price of ferrosilicon is affected by the price of coke, steel strap, silica, and power.

It is estimated that the unit smelting power consumption of ferrosilicon is as high as 8500 kWh per ton, and the energy consumption per unit value is even higher than that of electricity solution of aluminum.  For China, which has put forward the strategy of “carbon peak and carbon neutrality”, the supply contraction of energy-intensive industries is a general trend, and will continue to ferment. Some small and medium-sized ferrosilicon enterprises were eliminated.

In 2021, due to the implementation of the carbon neutrality policy, the price of ferrosilicon fluctuates sharply.  , China is committed to achieving a carbon peak before 2030, 2060 to achieve the goal of a carbon neutral, carbon neutral background, the country put forward rigid requirements for coal and coke output, and the development of the downstream steel industry has also formed strong support for coke.  The soaring carbon price, coupled with power rationing policies, has greatly increased the cost of ferrosilicon, which has caused the price of ferrosilicon to soar.

ferrosilicon price chart
Ferroalloy online supplies the ferrosilicon price chart

2. Guarantee from downstream demand

Because silicon and oxygen easily combine to form silicon dioxide, ferric silicon is often used as a deoxidizer in steelmaking.  Ferrosilicon is widely used in low alloy structural steel, spring steel, bearing steel, and heat resistant steel.

Ferrosilicon is widely used in the iron and steel industry, casting industry, magnesium production, and other fields.  Ferrosilicon produced in China not only meets domestic demand but is also exported all over the world.

In 2022, in the domestic market, it is expected that the real estate will weak and stable, the automobile industry will develop, and the demand for steel will decrease from the previous year.  The oversupply of the ferrosilicon market will not change in a short time.  But from June to July, domestic ferrosilicon enterprises have reduced production, greatly reducing the pressure on the factory inventory. 

3. The production capacity of the Ferrosilicon plant

Currently, the global annual production capacity of ferrosilicon is about 11.1 million tons, and China’s production capacity is about 8 million tons.  In 2020, China’s annual output of ferrosilicon is 5.320,900 tons, with a slight decrease year-on-year.  

ferro silicon price chart
ferro silicon price chart

With the declining demand for domestic construction and infrastructure, the apparent consumption of ferrosilicon in China is declining. The price of ferrosilicon is declining from May to today. The ferrosilicon price is close to the production cost.

About 10,000 tons belong to the state of tight balance between supply and demand. 

China is an important ferrosilicon exporter.  In 2019, the export quantity of Ferrosilicon in China was 386,400 tons, and in 2020, the export quantity of ferrosilicon in China was 386,400 tons 

4. Impact of COVID-19

In the first half of 2022, The epidemic was well controlled in China, and the production and export of ferrosilicon were not affected.

In general, ferrosilicon is in a state of double reduction in supply and demand. The reduction of downstream demand forces ferrosilicon factories to reduce production. The ferrosilicon price is close to the cost. (except for power plants). However, due to the difficult transaction, the market has not been stable, in the short term, the market still needs to pay attention to the production reduction of manufacturers.

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