SunSirs: Ferrosilicon Market current situation Analysis

• Price trends

According to the Sunsirs's monitoring, the price of the ferrosilicon is tend to increase this week. At present, the mainstream offer price in the domestic market of ferrosilicon 75# is around 6000 yuan/ton($855.615/ton), while the price of ferrosilicon 72# is 5600-5750 yuan/ton($798.574/ton - 819.964/ton). Compared with the offer last week, the quotation of ferrosilicon has slightly increased.

• Factor Analysis

In the second half of last week, with a new round of silicon iron bidding prices for a large steel in north China set, plus a few other steel mills this bid flat or slightly down, the overall transaction situation is slightly general. Silicon iron market calm, and even some of the factory prices have been slightly adjusted. Return this week, the market appears to reverse. On May 17, the market reported that the implementation plan of off-peak production in some key industries in the winter and spring of 2019-2020 in zhongwei was released. Ferroalloy enterprises in this region have received documents of off-peak production, among which six enterprises, including Maoye, Daiyou and Hefa, have requested to stop production within a specified time, involving output of more than 20,000 tons per month. With the market already running low on cash (most factory orders have been booked up until the end of this month or the beginning of next month), there is no doubt that most in the industry have high hopes for this and the overall willingness to support prices has increased significantly. But as for the relevant personnel said, before silicon iron prices fell sharply, the region has stopped production, production phenomenon. As a result, the impact is not as big as imagined, the short-term ferrosilicon prices are expected to fluctuate lightly. As for the late trend, also need to pay close attention to the new round of steel bidding situation.

Steel market aspect In November, the national steel exports of 4.58 million tons, a month-on-month decline of 200,000 tons, a decline of 4.2 percent; Exports of steel in the january-november period were 59.66 million tons, down 6.5% year on year. According to the world steel association (WSA) prediction, global steel demand will grow by only 1.0% in 2020. Although China and the United States have temporarily reached a consensus on the first stage of trade frictions, in the long term, the global economic slowdown and the rise of trade protectionism in the region still make the international market complex and severe, and the export situation of domestic steel enterprises is still not optimistic.

Futures market  Today's silicon iron futures 2005 contract of the ZhongYang pull up, the trading activity is poor, and all day around the average daily oscillation up(the highest 5814 intraday and the lowest 5764 points intraday). Technically speaking, the MA5 moving average has a tendency to turn up and break all MA averages today. The MACD is effectively slightly enlarged on the red column, but before the delivery of 01 ferrosilicon, the space above the 05 contract is somewhat limited, and the bottom 5700 line is strongly supported. Spot market spread the message of stop production again, but the actual transaction is general (operation recommendations, 5700 line below the more operation).

• Short term forecast

Overall, in the short term, Sunnsirs’s analysts predict that prices will rise.

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