Monthly Report of Ferrosilicon Market in December, 2022

  • Friday, December 30, 2022
  • Source:Ferro-Alloys.com

  • Keywords:ferrosilicon futures, ferrosilicon spot, ferrosilicon demand, ferrosilicon supply, steel market, magnesium market
[Fellow]In December, the inventory was still tight. Under the environment of better profits, the production remained stable, with high enthusiasm.
 
[Ferrosilicon Market] In December, the tender price of ferrosilicon 75B of HBIS Group was set at 8700 CNY/T, with a month on month increase of 50 CNY/T, slightly exceeding expectations, which brought some confidence to the market; In November, the national ferrosilicon output was about 470000 tons, a slight increase compared with that in October. In December, the inventory was still tight. Under the environment of better profits, the production remained stable, with high enthusiasm, and there was still an increase expectation on the whole; The Futures this month rose first and then fell, and then rose strongly at the end of the month. In December, the opening price of the 2303 main contract was 8310, the highest price was 8650, the lowest price was 7942, the closing price was 8486, the settlement price was 8450, the trading volume was 2277839, and the position was 180048, an increase of 3.59%; The spot market was a little pessimistic once affected by the overall situation, but it was relatively stable on the whole, the quotation remained firm, and the supply of low price goods decreased; The release of downstream demand was slow, the transaction atmosphere was calm, and most of them were cautious. Some steel mills started steel tender in January, 2023: HBIS Group 's 75B ferrosilicon tender in January was 2099 tons, an increase of 700 tons from December 2022; Yangchun New Steel set its tender price at 8850 CNY/T. With the new round of steel tender being launched one after another, the demand was released intensively. In addition, some steel mills begin to stock up for the Spring Festival, which drived the market to clinch deals. Some manufacturers said that before the Spring Festival, the price of ferrosilicon was highly likely to maintain a firm and good running trend, which was easy to rise but hard to fall. Analysts from Ferroalloy.com believed that the purchase of steel mills was expected to continue until the end of February, and the market would remain stable until the first quarter of next year. Focus on downstream demand follow-up and futures market trend.

[Ferrosilicon Exports] According to data of China Customs, in November 2022, China exported 34174.184 tons of ferrosilicon (containing by weight more than 55% of silicon), a month on month decrease of 2413.398 tons, or 6.60%; The year-on-year decrease was 20,941.412 tons, or 37.9954% (36587.582 tons were exported in October 2022; 55115.596 tons were exported in November 2021). In November 2022, China exported 2897.314 tons of ferrosilicon (containing by weight ≤ 55% of silicon), an increase of 490.214 tons month on month, or 20.37%; A year-on-year increase of 1480.814 tons, or 104.54% (2407.1 tons were exported in October 2022 and 1416.5 tons in November 2021).

[Downstream Steel] Data from the National Bureau of Statistics: In November 2022, China's crude steel output wwa 74.54 million tons, up 7.3% year on year, with an average daily output of 2.4847 million tons, down 3.4% month on month. In the traditional off-season, the apparent consumption has declined significantly. With the approaching of the Spring Festival, construction projects in various regions were coming to an end, demand was further weakening, and the transaction atmosphere was cold; With the increase of pre-holiday maintenance in some steel plants at the production end, the output has also dropped. In terms of winter storage, according to the traditional experience, the winter storage period would be around December 20. However, due to the recent rebound in steel prices, which exceeded the expected price of steel traders, and they had a low willingness to store in winter. At present, the winter storage market was relatively flat. On the whole, short-term steel prices may continue to fluctuate. On the other hand, the current stock pressure of the steel plant was not great, and the enterprise operation was expected to improve strongly after the Spring Festival. With the implementation of the package policy of stabilizing the economy and the follow-up measures, the industrial production will gradually recover, and the industrial economy is expected to develop steadily.

[Downstream Magnesium] At the beginning of this month, with the improvement of the transactions, the magnesium market stabilized and warmed up, but the supply and demand pattern did not change substantially; After the price rise, downstream demand weakened again, and the factory's quotation decreased under pressure; By the middle of the month, the magnesium price had broken through a new low, and the market sentiment was impacted; Since late-December, as the transaction situation has improved again, and the preparation of goods before the Spring Festival has formed a certain support for the market, the factory's willingness to support prices has increased, the market mentality has improved, and the magnesium price has stabilized. Although the downstream demand follow-up was still weak at present, considering that the magnesium price has fallen below the cost line of some factories, it was difficult to reduce again. At the end of the month, the mainstream ex-factory cash quotation including tax of 99.9% magnesium ingots was about 21600 CNY/T.

 

  • [Editor:kangmingfei]

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