SHANGHAI, Sep 22 (SMM) – Futures contracts of silicomanganese and ferrosilicon both rose to the daily limit after opening on Wednesday morning.
The prices of ferrosilicon keep rising and nearly double the price at the beginning of the year as of September. The prices of silicomanganese have increased by 37% from end-August.
As of September 22, the average spot price of SMM Guizhou Silicomanganese 6517 was 10,000 yuan/mt (by acceptance), up 2.3% from the previous trading day, an increase of over 2,000 yuan/mt on the month.
In the spot market, the silicomanganese prices remain high and chaotic. Affected by the high futures prices, spot quotations are generally high, and manufacturers are reluctant to sell at low prices. However, due to the long-term power rationing and production restrictions , the market is in short supply of spot goods, and some downstream with rigid demand made purchase at high prices.
The market has a wait-and-see attitude, and the prices of silicomanganese may continue to run at a high level in the short term.
At the beginning of last week, the power and production restrictions in the main production areas intensified. And the restrictions in south China was more serious, where the spot supply was severely in shortage.
In the middle of last week, more plants were shut down in Guangxi, and some plants in Ningxia, Yunnan and other places were also shut down. The silicomanganese futures prices rose several times, and the spot prices broke 9,000 yuan/mt.
Later due to the strong downstream demand, the transaction prices were around 9,600 yuan/mt in cash near the weekend.
Downstream industries will also reduce production, but the output of silicomanganese will be lower than downstream production, and the market is bullish over the silicomanganese prices.
SMM expects the silicomanganese prices to further rise slightly this week.