Supply dynamics continue to shape the ferrosilicon landscape this month. Production costs remain elevated across thermal-power-based regions, with electricity tariffs sustaining recent highs. This cost environment has led to mounting operational losses, prompting several large-scale producers in Gansu to implement full furnace stoppages as a defensive measure. The resulting decline in national operating rates is gradually constricting available spot volumes, and market participants are now closely monitoring whether similar curtailments will emerge in other producing provinces.
On the demand side, the steel sector is navigating the traditional summer off-season, characterized by subdued construction activity and moderate project execution. Nevertheless, hot metal output has not experienced any significant deterioration, ensuring that baseline ferrosilicon consumption remains stable. Tender activities offer timely reference points: a major Jiangsu-based steelmaker has concluded a 500-tonne procurement on a delivered, tax-inclusive basis, while Hebei Iron & Steel's August inquiry is widely regarded as a key benchmark for near-term pricing expectations. In the magnesium segment, production maintenance schedules have reduced available supply, though intermediary buying behavior remains restrained, with most participants adopting a wait-and-see posture.
Market outlook suggests a delicate balance between opposing forces. On one hand, sustained cost pressure, producer discipline, and ongoing mill restocking provide underlying support. On the other, lingering uncertainties regarding post-summer demand recovery-particularly in construction and infrastructure-cap upward momentum. The ferrosilicon market is therefore expected to maintain a range-bound, mildly constructive bias in the near term, with directional clarity likely to emerge from three critical variables: further supply-side responses, the finalisation of major steel tenders, and any adjustments to regional power pricing or policy.
Our team continues to track these developments closely and will provide timely updates as the situation evolves.
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