The questions and answers of ferro silicon
Apr 14, 2025
Q: What is the new space for ferro silicon production capacity and the market launch?
A: The actual landing capacity space for ferro silicon is relatively fast and large, about 200,000 to 750,000 tons, of which 300,000 tons are internal consumption, used for supporting magnesium metal, and will not flow into the market. The new capacity in the market may be around 100,000 to 450,000 tons. If the price and profit of state-owned enterprises can be maintained at around 500 to 1,000 yuan, these emerging capacities will gradually be put into the market, including the production that was previously shut down. From the perspective of the new capacity of magnesium metal, the growth may be limited. The market price of magnesium in the second quarter is running at a low level, and the incremental demand for ferro silicon is small.
Q: What are the main factors affecting the price trend of ferro silicon?
A: Electricity costs and coal prices may be the main factors affecting the price trend of ferro silicon. At the same time, policy changes, especially the performance of the market and the interpretation of favorable policies, will also affect the price of ferrosilicon. For example, the documents in Qinghai require manufacturers to report production and energy consumption status, and may implement annual energy consumption planning control, which may lead to market expectations of ferro silicon capacity control, thereby affecting prices.
Q: What is the utilization rate and resumption of production of ferro silicon capacity?
A: At present, the capacity utilization rate of ferro silicon is about 36%, and some Jiangsu production capacity has not yet resumed. It is expected that the capacity utilization rate will return to more than 50%, or even more than 60%, which is already a relatively high start-up rate. In the past week or two, many companies are preparing to start work, and the capacity utilization rate is expected to increase further.
Q: What is the logic behind the rise in ferro silicon prices?
A: The rise in ferro silicon prices is mainly due to the interpretation of policies, and the market has high expectations for favorable policies. Although the fundamentals have not performed well, market sentiment and the interpretation of policies may lead to price increases. At the same time, it may also be because the market expects similar situations in 21 years, which increases the imagination space.
Q: What is the proportion of ferro silicon in the cost of crude steel and magnesium metal?
A: The proportion of ferro silicon in the cost of crude steel is very small, about 3.5 kg to 4 kg per ton. If the price of ferro silicon rises by 1,000 yuan, the cost per ton of crude steel will rise by 3.5 to 4 yuan. In the cost of magnesium metal, ferro silicon accounts for a relatively large proportion, because 1.1 tons of ferrosilicon are needed to produce one ton of magnesium metal, which has a greater impact on the cost of magnesium metal.
