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- On December 3, 2020, Ningxia Zhongwei issued the notice on staggering peak production in some key industrial industries during winter and spring 2020-2021. Some ferroalloy (ferrosilicon) enterprises were included in the staggered peak production range.

- At 9:00 a.m. on December 3, 2020, Fugu Magnesium Association and Semi-coke Association held an emergency meeting. They pointed out that the current guiding price for magnesium ingots storage was 14000 yuan per ton including tax, and required the manufacturers to make firm quotations (800 yuan per ton of small sizes of semi-coke) to reduce losses. How to reduce production are also discussed.

- The semi-coke plants are expected to cut down production by 35% and the price is expected to reach 1150 yuan per ton, which boosted the ferrosilicon market.

- Ningxia and Gansu have issued electricity price adjustment policies, and the impact is not very clear at present.

- The Inner Mongolia Development and Reform Commission has issued the draft of several safeguard measures for ensuring the completion of the energy consumption control targets and tasks in the 14th five year plan. It is proposed that arc furnace of 25000 KVA and below and the electric arc furnace of 30000 KVA and below should be withdrawn in principle in 2021. From January 1, 2021, the new production capacity of ferroalloys and other industries will not be approved, which have been approved but has not started before the end of 2020, also will not be approved.

[Steel Bidding] CITIC released its ferrosilicon 72# bidding price at 7300 yuan per ton, which increased by 750 yuan per ton than the previous month; Guangxi Iron and Steel Group’s bidding price was 7380/7500 yuan per ton with a total volume of 10000 tons; Shagang Group’s bidding price set at 7180 yuan per ton, an increase of 780 yuan per ton vs. last month. HBIS Group set its ferrosilicon bidding price at 7200 yuan per ton, up 600 yuan per ton month on month and the volume increased 333 tons to 2573 tons.

[Spot Market] Semi-coke production reduced and the price rose; winter storage and the willingness to prepare goods has increased as the end of year approaching, the bidding volume and price of steel plants have increased significantly, and the metal magnesium market is generally stable and good; the ferrosilicon plants are short of spot goods and arrange production orders, and the inventory of delivery warehouse has been rapidly removed, and ferrosilicon market is relatively optimistic. Most large and medium-sized manufacturers do not quote for the time being because they are "out of stock". Some manufacturers' quotations are rising steadily, but there is also wait-and-see sentiment. Focus on the changes in the relationship between supply and demand (driven by profits and various favorable factors, ferrosilicon output is on the rise; the impact of low season of downstream steel demand and crude steel output compression), the changes in ferrosilicon production cost (including the higher transportation costs, the lower electricity costs in main production areas, etc.) and the futures market trend.

[Ferrosilicon Futures 2101 Contract] Opening price of ferrosilicon futures 2105 contract in December was 6,100, highest price was7,356, lowest price was 6,074, closing price was 6,616 and the settlement price was 6,654. The trading volumes were 2,477,049 and the positions were 77,504.

[Steel Market] Due to the cost pressure of winter maintenance, the steel production and inventory have decreased slightly, but after all, the terminal demand is weak in the off-season, and the downstream transaction is indifferent. Affected by the price of iron ore, coke and other raw materials, the steel price is volatile this month, with mixed ups and downs. The market mentality is more cautious, and the wait-and-see mood is strong. In 2021, MIIT will reduce the output of crude steel, issue the new implementation measures for capacity replacement of iron and steel industry.

[Metal Magnesium Market] With the increase of coal price and the stabilization of ferrosilicon market, combined with the impact of environmental protection and production restriction and others, the metal magnesium market was generally good in December, and the price continued to rise. Current cash quotation including tax of 99.9% magnesium ingots in Fugu area was around 15500-15600 yuan per ton.

China Ferro-Alloys Industry Annual Conference & Market Outlook of Manganese, Chrome, Nickel Ore & Ferroalloys

• [Editor:kangmingfei]