Outlook for China’s Ferrosilicon Market Trends in 2025

Market Review of Ferrosilicon Market in 2024 and Outlook of Ferrosilicon Market Trend in 2025

Market Review of Ferrosilicon Market in 2024

Phase I: (January-March) continued decline. Due to factors such as the accumulation of inventory by manufacturers during the Spring Festival, the downward shift of the cost center of gravity, and weak steelmaking demand, prices continued to fall, falling below the cost of factories in some production areas, and the number of companies shutting down for maintenance increased. Production fell month by month, and production fell to 400,000 tons in April.

Phase II: (April-May) rapid increase. The peak season terminal demand improved, the output of steel mills increased significantly, the market increase led to active speculative demand, the short-term supply and demand of ferrosilicon was mismatched, prices rebounded, and increased profits drove silicon plants to resume production.

Phase III: (June-October) oscillating decline, real estate was sluggish, terminal demand for ferrous metals was weak, steel mill output declined, ferrosilicon output increased, silicon prices continued to fall, and Ningxia line maintenance output fell from August to September.

Phase III: (October-December) Slight increase followed by a decline. On the eve of National Day, domestic macroeconomic policies stimulated the stock market and futures, and silicon prices rose briefly. After the holiday, affected by Zhongwei’s resumption of production and cost decline, prices fell.

Outlook for the trend of ferrosilicon market in 2025

(I) Production forecast: It is expected that ferrosilicon production will increase slightly in 2025

In 2024, due to factors such as general profits and power transformation, although new production capacity will be invested, the total output will increase slightly compared with 2023. In 2025, Gansu and Inner Mongolia will still have new production capacity investment, and Qinghai will have transformation capacity investment. It is expected that the annual output in 2025 will be between 5.6 million and 5.7 million tons. In the absence of significant improvement in profits, the increase will be limited.

(II) Cost forecast: the cost center of gravity moves down

The biggest impact on ferrosilicon costs is electricity prices, which are expected to fall when the proportion of green electricity increases in summer. Semi-coke is mainly linked to the price of raw coal, and the price changes of silica and iron oxide have limited impact on costs. It is expected that the cost center of gravity of ferrosilicon will fall in 2025, and the decline will narrow.

(III) Demand forecast: Crude steel fell slightly, magnesium metal remained stable with a small decline, and exports remained the same

It will take some time for the demand for terminal real estate and infrastructure to improve, and steel mills are still under pressure. It is expected that crude steel production will continue to decline slightly in 2025. The rectification of the semi-coke furnace has been completed. There will be fewer maintenance cases at the magnesium plant in 2024. The market price is expected to hover at a low level in 2025, and the maintenance cases will increase. The demand for ferrosilicon will remain stable with a small decline. Exports are firstly due to competition from other countries overseas, and secondly, the domestic re-export trade is active, which makes it more difficult for exporters to operate. The tariff will remain at 25% in 2025, and it is expected that exports will not improve in 2025.

(IV) Market Outlook for 2025

Based on comprehensive factors such as cost, supply and demand, we expect that the price will fluctuate between 5700RMB and 7000RMB in 2025. The start-up will be mainly adjusted by profits. Pay attention to the commissioning of new production capacity. In the absence of policies or other major positive stimuli, it is difficult for the market to rise sharply.