[Ferrosilicon Market] Due to stable production and insufficient follow-up of internal and external demand, the ferrosilicon market continued to weaken in the first quarter of 2023. The tender price for ferrosilicon in the first quarter of HBIS Group decreased from 8750 CNY/T in January to 8430 CNY/T in February, and then decreased to 8150 CNY/T in March; Shagang Group (Headquarters) had a new round of FeSi75-B ferrosilicon tender with a price of 7930 CNY/T, while the tender price for some steel mills in North China has been reduced to 7850 CNY/T in April. In January-February, the export volume of ferrosilicon (containing by weight more than 55% of silicon) decreased by 36868.663 tons or 32.70% year-on-year. Market transactions were sluggish, exports were not smooth, and inventory pressure was prominent in some regions (statistics showed that the current total inventory was around 200000 tons), and the confidence was insufficient, and sentiment was pessimistic. Factory maintenance and production reductions were increasing in Ningxia, Gansu, and other regions. Most enterprises in Qinghai avoided peak production. However, the current reduction in production was still insufficient to dilute the impact of weakening demand on the market. It was learned that some regions have suffered losses due to relatively high costs such as electricity prices. If there’s no positive news to boost the stimulus, the short-term ferrosilicon market would still not be optimistic, and it may continue to operate weakly. However, some representative enterprises in the industry have stated that the current market operation was within the normal range, and there was no need to excessively worry. Enterprises should adjust their operating methods based on their own conditions, and go through hard times together.
[Ferrosilicon Futures Market] In February 2023, the market of ferrosilicon Futures fluctuated significantly and operated in shock. The opening price of 2305 main contract was 7,972, the highest price was 8,196, the lowest price was 7,590, the closing price was 7,854, the settlement price was 7,876, the trading volume was 3,940,046, and the position was 147,113, down 1.75%.
[Downstream Steel Market] Under the influence of the international macro environment, the domestic steel market in March was relatively sluggish, with a cold trading atmosphere. Although the steel export volume in January-February was 12.19 million tons, a year-on-year increase of 49%, and the industry predicted that the export would be strong or continue until May, there were still many uncertain factors in the external environment, the market mentality was cautious. An analyst said that the demand for steel has been continuously declining, and due to the decrease in the growth rate of the main downstream industry of steel, the decline in the demand for steel in the later stage would be increasingly significant, with a decrease of one third in five to ten years. He suggested that enterprises embrace change, reduce costs and improve efficiency, enhance industry competitiveness, and continue to strive towards green, intelligent, and digital directions.
[Downstream Magnesium Market] Domestic and foreign demand continued to be weak, the exports of magnesium ingot declined continuously from January to February, coupled with insufficient support at the raw material end. In March, the domestic metal magnesium market was still in a downturn, with prices once falling below 20000 CNY/T. Although the decline began to stabilize in the late part of the month, and transactions have improved, the oversupply pattern has not changed, and magnesium prices were not easy to rise; Considering that the current magnesium price has fallen to the factory cost line, and in some regions the selling price lagged behind the costs, some manufacturers began to plan reducing production, it’s expected that there was limited room for further reduction. At the end of March, the mainstream ex-factory cash quotation including tax of 99.9% magnesium ingots was about 20300-20500 CNY/T. Pay attention to the subsequent changes in supply and demand.
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