Weakness Persists in Silicon Iron Market Amid Sluggish Demand

The silicon iron (ferrosilicon) market continued its downward trend yesterday, with prices experiencing a sharp decline due to weak demand and increasing short positions in the main futures contract. Market sentiment remains bearish as inventory pressures grow and cost support weakens.

Cost and Supply Dynamics

On the cost side, the price of Shenmu blue-carbon small materials has dropped to around 600 yuan/ton, leading to a slight decrease in silicon iron production costs. On the supply side, both suppliers and traders are struggling with rising inventories, prompting efforts to clear stock through various channels. Currently, the operating rate of silicon iron plants in Northwest China has fallen to around 40%, reflecting reduced production activity.

Demand Remains Under Pressure

The demand side shows no signs of recovery. Recent steel tenders have seen both volume and prices decline, as the impact of crude steel production controls becomes more apparent. Additionally, procurement from the magnesium metal industry has yet to pick up, further weighing on the market.

Short-Term Outlook

With demand expected to remain subdued, the silicon iron market is likely to continue its weak and range-bound trend in the near term. Market participants should monitor inventory adjustments and potential policy shifts in steel production controls.

For more updates on the silicon iron market and industry trends, stay tuned to our latest reports.