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Factors affecting the price of ferrosilicon

Date: 08-09-2023
Ferrosilicon is an ferro-silicon alloy made of semi-coke, iron oxide sheet and silica as raw materials and smelted in an electric furnace. Ferrosilicon is mainly used as a deoxidizer and alloying agent in steelmaking. The main factors affecting the price of ferrosilicon are as follows:

1. Macroeconomic situation.
The downstream of the ferrosilicon industry is mainly the steel industry and the magnesium metal smelting industry, the main downstream of the steel industry is the real estate industry and the automobile industry, and the main downstream of the magnesium metal is the automobile industry. Therefore, macroeconomic trends will inevitably have an impact on end-demand industries such as real estate and automobiles, which in turn will have an impact on ferrosilicon prices.

2. Own cost.
The main cost of ferrosilicon is electricity cost, and the electricity price is generally relatively stable, so ferrosilicon has relatively clear and solid cost support. Once the price is lower than the cost, the phenomenon of enterprises stopping and reducing production is obvious, and the reduction in production will promote the price to rise back to the cost line . In addition, although the cost of raw materials in the cost of ferrosilicon is relatively small, it fluctuates greatly. Therefore, when the price of semi-coke and other raw materials rises, the price of ferrosilicon generally rises accordingly.

3. The profits of the downstream steel industry.
Most of the demand for ferrosilicon comes from the downstream iron and steel industry. Iron and steel enterprises occupy a dominant position in the ferrosilicon market. The main basis for pricing ferrosilicon is the monthly bidding purchase price of iron and steel enterprises. However, due to overcapacity and a large number of enterprises, the ferrosilicon industry is often Forced to accept the price locked by steel companies. Therefore, the profit of the iron and steel industry directly affects the willingness to bid for ferrosilicon, which in turn affects the price of ferrosilicon.

4. Periodic changes in demand.
The pricing mechanism of ferrosilicon and the seasonal factors of the production of downstream steel mills will affect the demand for ferrosilicon and lead to periodic fluctuations in the price of ferrosilicon.

5. Policy and situation impact.
Changes in relevant policies will also affect the demand for ferrosilicon, resulting in price changes.

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