The recent surge in ferro silicon price has been driven by a combination of factors.
Firstly, China's State Council has released an action plan for energy conservation and carbon reduction for 2024-25, triggering expectations of stricter energy policies. The high energy consumption involved in ferro silicon production may be affected as a result. This anticipation has led to increases in ferro silicon futures and spot prices.
Additionally, the plan mentions controlling the scale of production of semi-coke (lan coke), a primary raw material for ferro silicon. Concerns about the high energy consumption in ferro silicon production have been heightened. These anticipated policy changes are expected to impact production costs, thereby influencing ferro silicon spot prices.
Supply dynamics have also played a crucial role in driving prices higher. Previous production cuts have led to tight supply, especially in major production areas such as Inner Mongolia, Ningxia, Qinghai, and Gansu. Due to the high electricity consumption in ferro silicon production, regional energy policies (especially in Ningxia) are expected to further impact supply.
Since the second quarter, the market has transitioned from the off-season to the peak season, resulting in increased demand and improved production profits. However, current supply growth exceeds demand, maintaining inventories at historically average levels. Recent increases in production have slowed inventory depletion, thereby positively impacting ferro silicon spot prices.
Ferro silicon price have been steadily rising since April, mainly due to tight supply and rising production costs. Reduced supply in the first quarter, coupled with increased demand from steel mills since April, has led to shortages, further exacerbated by rising raw material prices, driving up spot prices. If energy conservation policies are fully implemented, further price increases are expected.
Keywords: ferro silicon alloy, FeSi 75, FeSi 72, FeSi 65, ferro silicon price, ferrosilicon price, FeSi Powder
