Ferrosilicon Futures Hit The Daily Limit

In 2025, the proportion of non-fossil energy consumption will reach about 20%, and the energy-saving and carbon-reduction transformation in key areas and industries will save about 50 million tons of standard coal and reduce carbon dioxide emissions by about 130 million tons. We will make every effort to complete the binding indicators of energy conservation and carbon reduction in the "14th Five-Year Plan". In this regard, Liu Sen, an analyst at Yide Futures, said in an interview with a reporter from the China Times that the market is prone to associate "energy conservation and carbon reduction" with the "double control of energy consumption" in 2021, and is still in awe of the "one-size-fits-all power outage" in 2021.

Liu Sen said that this sentiment also fueled the speculative demand for funds, and a large amount of funds entered the market, leading to a large-scale rise in ferrosilicon futures. At the same time, the document also mentioned "focusing on reducing non-power coal" and "rationally controlling the scale of the semi-coke (lignite) industry", which has a certain impact on the raw materials and industrial scale of lignite required for smelting ferrosilicon. One ton of lignite requires about 1.35 tons of lump coal, and one ton of ferrosilicon requires about 1.1 tons of lignite.

In addition, the relevant statements in the document also enhance the expectation of future cost increase of ferrosilicon, which has provided some support for the rise of ferrosilicon. However, from a rational perspective, the policy side has been proposing in recent years that "one-size-fits-all" rough law enforcement is strictly prohibited. In the past three years, as the main production area of ​​ferrosilicon, the Northwest has seen a significant increase in the commissioning of new energy power, and the scale of "green electricity" used by ferrosilicon enterprises has continued to increase, and the total carbon emissions of the industry have been reduced under the same output.

The supply side of ferrosilicon is still in the recovery cycle. This programmatic document is unlikely to suppress the output side of ferrosilicon in a short period of time, and it is difficult to interrupt the trend of continuous improvement in ferrosilicon supply. From the perspective of the document, the downstream demand side of ferrosilicon has not been restricted for the time being, and it is expected that the normal market will still be the main regulator in the short term. It is understood that the price of ferrosilicon futures has risen by 21.68% from March 28 to May 30, and ferrosilicon futures have already started a wave of increases at the end of March. Due to the marginal improvement in supply and demand, inventories have continued to decline, and steel prices have also been supported, driving the price of ferrosilicon futures to continue to move up.