The price of ferrosilicon in China is starting to fall

China's iron silicon prices began to fall in advance of the Spring Festival replenishment steel enterprises less. Magnesium plant demand is stable, exports have not improved, ferrosilicon is still in a state of excess, follow up on changes in ferrosilicon start. 

(1) Production forecast: It is expected that the production of ferrosilicon will increase slightly in 24 years in 2023, the demand will be reduced, the price of ferrosilicon will gradually begin to decline, the profits will gradually compress, and the production will decline compared with 22 years. In 2024, with the replacement of large furnace capacity in Inner Mongolia and the construction of new blast furnaces in Gansu, the annual output is expected to increase slightly compared with that in 23 years, but the output growth is limited before the demand does not improve significantly.

( 2) Cost forecast: The cost focus is not expected to change much in 24 years. Most of the cost of ferrosilicon is electricity, in January, the price of electricity will rise in Qinghai, the bottom line of ferrosilicon cost will move up, the price of electricity will basically decline slightly in 2-3 quarters, the price of charcoal is mainly linked to raw coal, it is expected that the space for subsequent decline is limited, the price of silica is relatively stable, and the cost center of ferrosilicon is expected to change little in 24 years. 

(3) Demand forecast: crude steel declines slightly, metal magnesium rebounds slightly, and exports maintain the status quo. Subject to general overseas demand and domestic and foreign low price competition, it is expected that the export of ferrosilicon will not improve in 2024. Metal magnesium Fugu has a magnesium plant tentative resumption of production, need to pay attention to the resumption of production next year, the production of magnesium plant is expected to increase slightly, but the corresponding Fugu ferrosilicon plant will also resume production. The focus is still on steel mills, in the case of the most terminal real estate, automobiles, infrastructure and other demand does not improve, steel mill production release will still be limited.

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