[SMM News] Ningxia Zhongwei production restriction affects the continuous ferrosilicon main opening and rising limit again.

SMM12 March 7: after the big rise on Friday, after the opening of trading on Monday morning, ferrosilicon futures rose again, reaching the limit. As of press time, the main contract of ferrosilicon was 7040, a new high in August 2018.

News side, Ningxia Zhongwei City Industry and Information Bureau and Ecological Environment Bureau issued a notice of off-peak production in some key industries in the winter and spring of 2020-2021. The notice covers 13 factories with an average daily output of 1400 tons of ferrosilicon and a monthly output of 42000 tons. Due to the recent serious reduction in ferrosilicon production, the production restriction is bound to cause a shortage of supply, while ferrosilicon 03, 01, 02, 04 contracts have risen one after another.

As a key link in the proportion of magnesium ingots' raw materials, ferrosilicon accounts for 40-50% of the cost of magnesium ingots. The rise in ferrosilicon prices is bound to push up magnesium prices in the near future. It is expected that at present, the supply and demand of ferrosilicon market is tight, the demand of ferrosilicon exports and metal magnesium ends is picking up, the fundamentals of ferrosilicon itself remain improved, the worries about production restrictions in the main producing areas are superimposed, and the contract price of ferrosilicon is expected to maintain a strong trend.