Ferrosilicon profits are falling, prices are weak

Futures: The main ferrosilicon 09 contract closed at 5174, +0.27%, up 14, and the daily position was reduced by 5651 (yuan/ton). Spot: The ferrosilicon market sentiment is not good and is in a weak state. The 72 ferrosilicon natural block in the main ferrosilicon production area is 5000-5100 yuan/ton including tax, and the 75 ferrosilicon price is 5600-5750 yuan/ton. The 72 ferrosilicon natural block in the Henan trader market in China is about 5000 yuan/ton excluding tax, and the 75 ferrosilicon natural block is around 5300 yuan/ton excluding tax.

The overall supply side is high, the profit on the cost side is low, the number of resuming production enterprises has increased, and the downstream delivery warehouse has been forced to cancel recently, and the inventory pressure remains unchanged. A ferrosilicon plant in Inner Mongolia plans to stop a small furnace tomorrow due to market reasons, affecting the output of 90 tons/day, and the shutdown time is tentatively set for 20 days.

On the supply side, it is expected that the output will not change much this week. On the demand side, with the expectation of off-season demand for steel in the later period, the supply-demand gap is expected to continue to expand, and the profit recovery of steel mills will be under pressure, which may form resistance for steel mills to continue production, which will be reflected in the inventory of ferrosilicon. It is expected that with the increase in centralized procurement of ferrosilicon steel mills in bidding this week, the bidding price of ferrosilicon at a steel plant in Guangdong on June 9 was 5,438 yuan/ton, the quantity was 500 tons, and the cash was tax-inclusive to the factory. Demand will pick up, and the accumulation of ferrosilicon inventory may be improved. The negative feedback of the black industrial chain continues, and the manufacturer's price has further declined this week. In the short term, the supply and demand of ferrosilicon is still the main contradiction, and the cost support of ferrosilicon will gradually weaken. Therefore, the price of ferrosilicon is expected to maintain a volatile and weak trend.