China: Ferro silicon prices edge down amid ongoing supply-demand imbalance

• Producers cut output amid cost pressures
  
  
• Steel mills reduce purchases, bids slide
  
  

CBC: The Chinese ferro silicon market remained under pressure, as price tags continued their weakening trend, edging lower w-o-w. The persistent mismatch between supply and demand drove this movement, with both ends of the market facing challenges that constrained momentum.

Grade 72% silicon: Prices inched down by RMB 160/t ($22/t) w-o-w to RMB 5,260-5,420/t ($731-753/t) ex-factory, inclusive of taxes.

Grade 75% silicon: Prices also dropped by RMB 80/t ($11/t) w-o-w to RMB 5,580-5,740/t ($776-798/t).

Market recap

Partial production cuts occur amid cost struggles: Some ferro silicon producers in key regions scaled back output due to sustained financial losses, driven by high input costs. However, strong buyer resistance to hikes limited producers' pricing power, forcing them to reduce tags despite mounting cost pressures, further straining market profitability.

Despite the cutbacks, inventory releases from delivery warehouses and expectations of regional production resumptions limited the overall contraction in supply.

Steel mills maintain a cautious stance: Confronted with narrowing profit margins and typical seasonal slowdowns, many steel mills reduced their ferro silicon purchase volumes, contributing to weak demand signals. Additionally, a growing number of steel enterprises aggressively pushed for lower bidding prices, with some even halting procurement activities entirely while adopting a wait-and-watch approach.

ZCE futures inch down w-o-w: On 4 June, ferro silicon prices on the Zhengzhou Commodity Exchange (ZCE) for July 2025 delivery were downslightlyby RMB 74/t ($10/t) w-o-w to RMB 5,184/t ($721/t) from RMB 5,258/t ($731/t).

Outlook

The ferro silicon market remains caught between cost pressures and weak downstream demand. Without a clear shift in production cuts or a rebound in steel sector demand, prices are likely to stay weak and stable, with a slight downward bias.