Rising coal coke futures prices have boosted sentiment in the black commodities market. Today, the double silicon futures market showed an upward trend, with the main manganese silicon contract closing at 6,018 yuan, up 0.94% from the previous day, and the main silicon iron contract rising 1.03% to 5,716 yuan:
On the demand side, last week's pig iron production saw a slight decline, but long-process steel mills maintain relatively high profit margins, suggesting limited downside potential for pig iron prices in the short term, which continues to support the underlying demand for dual silicon. However, terminal demand has not shown significant improvement, with a strong sense of caution prevailing within the industry, and steel mills remain reluctant to stockpile, limiting the potential for increased demand for dual silicon. Overall, there has been no significant fluctuation in iron alloy demand, and its impact on the market is limited. Future attention should focus on the latest alloy procurement tenders from steel mills.
On the supply side, alloy manufacturers' profits have improved, and production has generally increased. According to Mysteel's survey and statistics, the total production of 187 manganese silicon producers in July was 819,600 tons, an increase of 8.94% from the previous month. In the silicon iron production area, 136 production enterprises produced 446,700 tons in July, an increase of 7.88% month-on-month, or 32,600 tons. The supply of dual silicones has slightly increased, which may exert potential downward pressure on futures and spot prices. However, while the market's "anti-internal competition" sentiment has cooled slightly, the overall "anti-internal competition" trend has not yet ended. The market still has certain expectations regarding the contraction of dual silicon supply. It is essential to closely monitor the implementation of relevant policies moving forward.
In terms of manganese silicon costs, the manganese ore market has been fluctuating, with inquiries putting downward pressure on prices and transactions showing some flexibility. The fifth round of price hikes for coke has been fully implemented, with the market maintaining a relatively positive sentiment. Currently, manganese silicon costs are stable with a slight upward trend, which may provide good support for the market. Regarding silicon iron costs, the Shenmu lignite market remained stable today, but coal prices continue to support lignite prices. Currently, inventories of small and medium-sized lignite remain tight, and prices may continue to improve in the future.
Our company's view is that the "anti-internal competition" trend has not yet had a substantial impact on manganese silicon supply and demand, and more time is needed to verify its effects. We will continue to monitor macroeconomic and supply-demand changes, as market sentiment remains somewhat divided. In the short term, we expect continued volatility. The current fundamentals of silicon iron also show no major contradictions, and we anticipate that prices will continue to fluctuate widely in the short term, with a focus on policy implementation and cost changes.
Translated with DeepL.com (free version)
