The ferrosilicon market is currently demonstrating a volatile but upward trajectory, with a noticeably strong performance in recent trading sessions. Industry institutions have shared their perspectives on the future movement of the ferrosilicon market, as summarized below:
Nanhua Futures indicated that declining production profits in the ferroalloy sector are expected to weaken the incentive for further output increases. Additionally, with the arrival of the dry season, production in southern ferromanganese regions is projected to gradually decline. The term structure of ferroalloys is gradually improving, with some contracts shifting from a contango to a backwardation structure, which is favorable for short-term price increases. However, the term structure of coking coal-a key raw material-has not shown similar improvement, with its contango structure deepening compared to previous periods. The long-term trading logic for ferroalloys remains centered on anti-internalization expectations. With prices hovering near cost levels after recent declines, the downside space appears limited.
Zhongcai Futures analysis emphasized that cost-side support remains relatively solid. While manganese ore prices showed mixed movements, electricity prices in major production regions have increased as anticipated. Recent fundamentals provide some price drivers for ferroalloys: on one hand, an unexpected rebound in weekly molten iron output exceeding 2.4 million tons has bolstered expectations of robust demand support; on the other hand, electricity costs in key production areas such as Qinghai and Ningxia have risen, in line with seasonal weather patterns as mentioned in the September alloy monthly report. However, persistent oversupply in the alloy market continues to exert downward pressure on prices, significantly limiting the effectiveness of these positive drivers. Limited improvement in supply-demand dynamics is further evidenced by continued substantial inventory accumulation. Overall, both silicon manganese and ferrosilicon prices are expected to remain volatile.
Guoxin Futures pointed out that although ferrosilicon production has declined week-on-week, steel output has also decreased. According to Mysteel data, the operating rate (capacity utilization rate) of 136 independent ferrosilicon enterprises nationwide fell by 1.50% compared to the previous week, reaching 34.84%. Daily production decreased by 1.70%, or 280 tons, to 16,150 tons. The future movement of ferrosilicon remains closely tied to energy price fluctuations, and a watchful approach is recommended for market participants.
