Ferro Silicon Market Analysis

Ferro Silicon Market Analysis

 (Oct-Dec 2025)

October 2025: Prices Fell First Then Recovered; Ample Supply Constrained Momentum

1. Price Trends
   • Spot Market: The average price of silicon iron (FeSi75-B) in Ningxia stood at 5,227 RMB/ton, a slight decrease of 0.27% month-on-month. Prices initially declined due to post-holiday inventory accumulation but rebounded moderately in mid-October with the launch of steel mill tenders. The FOB price of 75# silicon iron remained around 1,100 USD/ton.
   • Futures Market: Driven by positive sentiment in the coal sector, the main silicon iron futures contract rose to around 5,500 RMB/ton by the end of the month.
2. Key Drivers
   • Supply: National monthly output of silicon iron reached approximately 490,000 tons, with high operating rates maintained in Ningxia and Inner Mongolia. Only Gansu saw a 5.97% drop in operating rates due to enterprise maintenance, resulting in overall loose supply.
   • Demand: Steel mill tenders were weak. HBIS (Hebei Iron and Steel Group) set its October FeSi75-B tender price at 5,660 RMB/ton, a decrease of 140 RMB/ton from the previous round. Steel mills adopted a rigid-demand purchasing strategy, while exports remained sluggish amid the off-season in Japan and South Korea.
   • Cost: Semi-coke prices rose by 50 RMB/ton due to tight lump coal supply, offsetting the impact of a slight reduction in electricity prices. Silicon iron enterprises faced an average loss of around 350 RMB/ton.

November 2025: Range-Bound with Limited Declines

1. Price Trends
   • Spot Market: The average price of FeSi75-B in Ningxia fell to 5,114 RMB/ton, a 2.16% decrease from early November, with mainstream quotes ranging from 5,050-5,200 RMB/ton. HBIS’s November FeSi75-B tender price increased by 20 RMB/ton to 5,680 RMB/ton, serving as a short-term price anchor.
   • Futures Market: The main silicon iron futures contract traded weakly in a range, closing around 5,354 RMB/ton at the end of the month, constrained by a bearish technical pattern.
2. Key Drivers
   • Supply: National output decreased slightly by 0.77% month-on-month, but the supply surplus from October reached 40,000 tons, leaving the loose supply structure unchanged. Some enterprises in Qinghai and Ningxia planned production cuts due to losses, leading to a 10.21% month-on-month decline in total inventories, though hidden inventory pressure persisted.
   • Demand: Crude steel output dropped by 12.1% year-on-year, with steel mill molten iron production decreasing month-on-month. While non-steel demand (e.g., for magnesium metal) grew moderately, it failed to offset the decline during the steel industry’s off-season.
   • Cost: Expectations of electricity price hikes in Ningxia strengthened, and semi-coke prices remained stable supported by winter coal demand. Enterprise loss margins narrowed, boosting sentiment to maintain prices.

December 2025: Strengthened Cost Support; Futures Oscillated Upward

1. Price Trends
   • Spot Market: On December 2, mainstream quotes for FeSi75-B rose by 50 RMB/ton to around 5,300 RMB/ton. Ningxia quoted 5,080-5,170 RMB/ton, while delivered prices in Henan and Hebei ranged from 5,465-5,769 RMB/ton.
   • Futures Market: The main silicon iron futures contract 2603 rose from 5,390 RMB/ton at the start of the month to 5,546 RMB/ton on December 4, before retracing slightly to 5,390 RMB/ton on December 5, showing an oscillating upward trend followed by a pullback.
2. Key Drivers
   • Supply: The operating rate of 136 independent silicon iron enterprises nationwide stood at 33.41%, a month-on-month decrease of 0.4%, with daily output falling by 150 tons. Production cuts and suspensions increased in Qinghai and Ningxia due to rising electricity prices.
   • Demand: East China steel mills launched a 300-ton silicon iron tender, but overall demand remained weak. News of steel mill production cuts constrained raw material purchases.
   • Cost: Electricity prices in Ningxia and Qinghai increased by 0.01 RMB/kWh and 0.03-0.04 RMB/kWh respectively, raising production costs. Enterprises adopted a cautious stance with reduced sales and stronger price support, while futures markets provided backing to spot prices.

Institutional Outlook & Key Market Nodes

• Institutional Views: Zhonghui Futures believes the upward momentum of silicon iron is unsustainable and expects range-bound trading. Guosen Futures holds a cautiously bullish outlook supported by year-end electricity price hikes. Ruida Futures notes that prices have rebounded from oversold levels, warning of potential technical correction risks.
• Key Focus Areas:
  • Steel mill tender pace in December
  • Implementation of production cuts in Ningxia/Qinghai
  • Price fluctuations of semi-coke and thermal coal
  • Impact of crude steel production policies on demand