[Ferrosilicon Market] In the traditional peak season of September, as the operating rate of downstream steel plants continued to rise, and the demand for replenishment before the National Day holiday increased, ferrosilicon transactions improved, supply was getting tight, and the market warmed up. Some steel plants took the lead in releasing the tender information in October, with the price mostly around 8400 yuan per ton, up 300-500 yuan per ton from that in September; In addition, due to factors such as the transportation costs hike up caused by the control measures in relevant production areas, the market confidence enhanced, the Futures market fluctuated upward in September, and the enterprises in Zhongwei region of Ningxia gradually accelerated the resumption of production; The increase in the price of the cost end semi-coke (it was reported that Shenmulan Semi-coke Group issued a notice that it decided to implement 2000 yuan per ton for large-sized materials, 1900 yuan per ton for medium-sized materials, and 1850 yuan per ton for small-sized materials from 0:00 on September 20), which also supported the market. Under the influence of multiple favorable factors, the spot price of ferrosilicon risen steadily in a row. However, on the other hand, the downstream steel mills were still under the pressure of loss. They still maintained a low inventory of raw materials, and the peak demand season may not meet the market expectations. Therefore, we still need to pay close attention to the output changes on supply side, downstream demand and Futures market trend.
[Futures Market] In September, the opening price of 2211 contract was 7872, the highest price was 8586, the lowest price was 7508, the closing price was 8466, the settlement price was 8400, the trading volume was 3419797, and the position was 106485, an increase of 7.41%.
[Ferrosilicon Exports] In August, the overseas demand reduced, and ferrosilicon exports declined. According to data of China Customs, in August 2022, China exported 41854.584 tons of ferrosilicon (containing by weight more than 55% of silicon), a month on month decrease of 15855.914 tons, or 27.47%; The year-on-year decrease was 26973.122 tons, or 39.19%. (57710.498 tons were exported in July 2022; 68827.706 tons were exported in August 2021). In August 2022, China exported 484152.284 tons of ferrosilicon (containing by weight ≤55% of silicon), a month on month decrease of 406.82 tons, or 15.84%; A year-on-year increase of 466.725 tons, or 27.55%. (2567.62 tons were exported in July 2022; 1694.075 tons were exported in August 2021).
[Downstream Steel] In the September-tradition peak season, the blast furnace operating rate of the steel plants continued to rise, and the demand for raw materials expanded. It was expected that the steel enterprise's capacity would be further released under pressure, but the release was expected to be limited under the background of low demand and low profits. On the whole, due to the arrival of the peak season, many places entered the construction period, as well as property market policy was further relaxed,and the market had strong expectations for the future. However, after all, the downstream demand data was poor, the market was still on a downward trajectory, and it would take some time for the industry related stimulus policies to play a role. The downstream demand in the fourth quarter was still pessimistic, and the pressure on the steel mill profits was still there. In addition to the impact of the environmental protection and production restriction policy in the fourth quarter, the peak season was difficult to meet expectations.
[Downstream Magnesium] In September, the transactions of domestic magnesium metal increased significantly compared with the previous period, the factory inventory was effectively released, and the confidence was enhanced. However, the overall demand was not followed up enough, and the market lacked support from other favorable factors, so the magnesium price was subsequently pressured back slightly; In late September, with the approaching of the National Day holiday, downstream users increased their stocking and replenishment on demand, and transactions increased. The price of magnesium rose steadily, and the prices of coal and ferrosilicon at the raw material end were firm, supporting the stable operation of magnesium price. On the whole, the price of magnesium in September fluctuated between 24000-25000 yuan per ton, which was significantly higher than that in August.