SMM6 March 18: ferrosilicon main contract fell for many days in a row, and finally began to rise around June 12, ferrosilicon main futures prices rose rapidly from 5500 yuan / ton to around 6000. Today, the main contract of ferrosilicon 2010 soared into the sky, which soared 5.58% in intraday trading. As of the day's close, the main contract of ferrosilicon 2010 soared 4.61% to 6030 yuan / ton.
Ferrosilicon is a ferroalloy composed of iron and silicon. Because silicon and oxygen can be easily synthesized into silicon dioxide, ferrosilicon is often used as a deoxidizer in steelmaking. At the same time, because a large amount of heat is released during the formation of SiO2, it is also beneficial to increase the temperature of molten steel. In addition, ferrosilicon can also be used as an alloy element additive, which is widely used in low alloy structural steel, spring steel, bearing steel, heat resistant steel and electrical silicon steel.
According to SMM, the price of ferrosilicon was too low and the operating rate was insufficient, so the ferrosilicon futures contract went down, and then the factory limited production and guaranteed the price. At the same time, at the end of May, steel mills invited tenders, and the demand expanded, so that ferrosilicon was in short supply. Ferrosilicon prices rose in June and have continued until now. At present, the spot price of ferrosilicon is about 5300 yuan / ton for 72 and 5700 yuan / ton for 75. 72% of ferrosilicon is mainly used as deoxidizer in steel mills, and 75% of ferrosilicon is used in magnesium plants to reduce magnesium.
In the first five months of this year, China's crude steel production was about 412 million tons, up 1.9% from the same period last year, steel production was 488 million tons, up 1.2% from the same period last year, and pig iron production was 356 million tons, up 1.5% from the same period last year, according to the National Bureau of Statistics.
Affected by the epidemic, the national economy has been impacted. In order to restore economic growth, the state has vigorously promoted infrastructure construction, which has promoted the market demand for steel. In May, supply and demand of sectors such as automobiles and excavators increased significantly, leading to a significant increase in demand for steel plates.
At the same time, due to the epidemic, the downstream demand for steel in February and March was postponed to the second quarter, resulting in a substantial increase in steel demand in May and June.
According to SMM statistics, as of June 17, the impact of building materials caused by overhaul of steel mills was 160000 tons, 64600 tons less than that in May (224600 tons). As steel mills are still profitable and threads are still expected to be supported by the strongest demand under the impact of the epidemic this year, the willingness of steel mills to produce threads remains undiminished, and SMM expects steel production to remain high.
Earlier, the National Development and Reform Commission said that it would speed up urban renewal by taking the transformation of old residential areas as a starting point. It is necessary to transform a number of old residential areas, actively promote the replacement and recycling of household appliances and automobiles, give full play to the role of investment in the central budget, local government special bonds, and special anti-epidemic treasury bonds, speed up the construction of short board areas, and strengthen the expectation of iron and steel demand. Ferrosilicon as an important part of steel production, the opening of steel demand will also stimulate the ferrosilicon market.
