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Ferroalloy industry research: supply of iron, silicon, manganese and silicon together

Time:2018-04-19 Click:1705

The production enthusiasm of steel mill is high and the demand of iron alloy is boosted

Limited by environmental protection, the output of ferroalloy supply side has declined, but demand side steel mills are booming. Inner Mongolia Jun Zheng energy chemical Limited by Share Ltd supply and Marketing Center Marketing minister Zhou Keqing further introduced, in the near future, the steel factory procurement personnel are going to iron alloy enterprises, supply tension, ferroalloy prices fly.

It is understood that the above phenomenon is not only in the northwest region, but also exists in the whole country. Fujian Sanming Iron and steel August manganese silicon tender price was set at 7100 yuan / ton, up 2112 yuan / ton compared with July. In addition, Panzhihua Iron and Steel Co., Ltd. in August the price of manganese silicon tender price of 7520 yuan / ton, Shaanxi Hanzhoung iron and steel in August, the price of manganese silicon tender price of 7400 yuan / ton, all have improved compared with July.

How much is the production of raw materials purchased by the mills?

As steel prices rose and steel profits improved, steel plants began to expand production in March. The data of the World Steel Association showed that in June, the production of crude steel in mainland China was 69 million 470 thousand tons, up 1.7% from the same period, 66 million 250 thousand tons of gross steel production after deducting China, 1.6% in the same period, indicating that the construction rate of foreign steel mills continued to decline, the demand for foreign alloys in the summer holiday season was shrinking and the domestic demand remained strong.

In the first ten days of July, a large scale flooding occurred in the middle and lower reaches of the Yangtze River. The production of some steel plants in Jiangsu, Hunan and Hubei was affected, and crude steel output dropped slightly. In mid July, despite the limited production in Tangshan, the average daily output of crude steel released by China Steel Association was 1 million 763 thousand and 700 tons, a slight increase. 7 to August is the centralized maintenance period for domestic steel mills. After the seasonal overhaul, the demand for ferroalloys will only increase. Li Juan said.

Mysteel data statistics show that from 1 to June in 2016, the production of ferrosilicon in the whole country was 1 million 940 thousand tons, which was 13% lower than that in the same period in 2015. Over the same period, the output of manganese and silicon in China was 3 million 280 thousand tons, which was 35.7% less than that in the same period in 2015.

The production of manganese and silicon has declined sharply. Mysteel manganese silicon analyst Cha Sao Dong believes that the main reason is that the South has stopped more. The north and South are different, the north is hot and the south is cold. First, the cost of electricity and metallurgical coke in the south is obviously higher than that in the north, and the cost has no advantage. Two is that the South furnace type is small, the cost is high, and the northern furnace type can be reduced.

It is for these reasons that ferrosilicon and manganese silicon futures are also beginning to flourish. Among them, in July 22nd, the manganese silicon 1609 contract to obtain the maximum price of a single week and the largest increase in the history of a single week, July 25th continues to rise and stop in the near future.

Li Juan believes that before July, the maximum contract base of Mn Si 1609 was 1200 yuan / ton, the minimum was -160 yuan / ton, and the futures had long been attached to the spot, while in late July, the base spread was expanded to 1500 yuan / ton with the rise of spot price, and it was now near 1200 yuan / ton. With the 1609 contract approaching the month of delivery and tight supply, the demand for return now makes buying momentum continue to increase. However, considering that the price of the spot market is confused and the price difference between high and low, the higher the futures price is, the more heavy the price is, so the attitude of futures price bullish is slightly cautious in the return demand of the base.

Xie Xu, a senior researcher of the Western futures investment research department, believes that, in the long run, China's steel industry continues to produce capacity. For the ferroalloy enterprises, the downstream demand is difficult to boost, and the uncertainty lies in the supply side. The largest number of ferroalloy enterprises are developing circular economy industrial chain, which has advanced production equipment without being affected by environmental inspectors. At present, all enterprises are fully loaded with production and have plans to further expand their capacity. In addition, in mid August, the inspector of the current environmental protection group is about to end. The backward production capacity of small and medium-sized enterprises has the possibility of restarting under profit driving.  Therefore, the main factors that determine the price fluctuation of the ferroalloy are the strength of the production policy and the increase in the yield driven by profit. In the whole, the price of ferroalloy will maintain a strong trend under the support of low stock.

Li Juan also holds the same view, she thinks, although the recent bulk commodity overall backlash situation is obvious, but the price of ferroalloy is rising, which is mainly based on the tightening of supply, the spot price of silicon and silicon is up to 2500 yuan per ton. Short term price of manganese and silicon futures still has room for improvement. Enterprises can actively intervene in buying hedge operations and pay attention to the supply changes after mid August.

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