Oversupply is hard to match by replenishing inventory

In the third quarter of this year, with the recovery of commodity prices in the steel industry chain, the price of ferroalloy has rebounded, which makes the profit of the ferroalloy industry chain better, ferroalloy enterprises to increase the operating rate, ferroalloy production continues to rise. Demand side steel production profit is poor, steel mills a small amount of production, after October oversupply of ferroalloy gradually emerged, prices fell continuously. From the perspective of long-term supply and demand, the price of ferrosilicon is greatly affected by the price of power coal, and has fallen to near the cost line, and the contradiction between supply and demand is not big; The oversupply of manganese silicon is more serious, and the market still has greater downward pressure.
On the demand side, the steel end has a certain toughness in the demand for ferrosilicon, but the metal magnesium and export demand are sluggish. Data from the National Bureau of Statistics show that in September 2023, China's daily crude steel production was 2.737 million tons, down 1.8% from the previous month; The average daily production of pig iron was 2.3847 million tons, down 0.9% from the previous month. The average daily output of steel was 3,927,300 tons, an increase of 4.5% from the previous month. In September, China's crude steel production was 82.11 million tons, down 5.6% year on year; Pig iron production was 71.54 million tons, down 3.3% year-on-year; Steel production was 11.782 million tons, up 5.5% year on year. From January to September, China's crude steel output was 795.07 million tons, up 1.7% year on year; Pig iron production was 675.16 million tons, up 2.8% year-on-year; Steel production was 1028.87 million tons, up 6.1% year on year. From the demand side, on the one hand, the low inventory strategy of steel mills to suppress demand, but the third quarter of steel mills slightly replenishment, in October, the iconic steel mill recruitment also indicates that the demand for ferrosilicon is stable; On the other hand, magnesium demand and export demand are at a low level, which brings greater downward pressure on the price of ferrosilicon.
Looking forward to November, the temperature is gradually turning cold, and the demand for coal will turn from off-season to peak season after winter in the north, which will bring strong cost support to ferroalloys, especially ferrosilicon. The production of ferrosilicon itself has entered no profit space, although the export demand, metal magnesium demand is still poor, but the price continues to downward pressure is not large, so the overall price of ferrosilicon is mainly concussive. Manganese silicon oversupply situation is more serious, manganese mine end is not expected to appear supply bottleneck, but can pay attention to the recent shipment situation of Kangmiluo, northern manganese silicon production enterprises still have profits, and the market surplus may be 200,000 tons to 300,000 tons, the probability of policy limited production is not large. At the end of the year, steel mills will have a certain demand for replenishment, but according to the current supply and demand situation, replenishment is difficult to match the oversupply, and ferroalloy prices will still be weak. For more ferrosilicon consulting, please pay attention to Hainan West Asia Import and Export Group.

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