SHANGHAI Most Chinese ferrosilicon producers lifted their offer prices slightly this week after inquiries began to pick up.
Offers from major production bases, such as Ningxia, Gansu, Qinghai and Inner Mongolia, have risen to a range of 5,850 to 6,000 yuan ($936 to $960) per tonne, up 50 to 100 yuan ($8 to $16) from a week earlier, producer sources said.
"Steel prices recovered somewhat after the (weeklong national) holiday (at the end of September), so it gave ferrosilicon producers the confidence to raise offers to decrease losses," a source at an Inner Mongolia producer told AMM sister publication Metal Bulletin. The number of price inquiries has increased compared with before the holiday, she added.
A source at a smelter in Ningxia agreed but worried that it might be difficult to sustain demand after the price increases.
Spot ferrosilicon prices in the Chinese market remained unchanged Thursday at 5,800 to 5,900 yuan ($928 to $944) per tonne.
"There are two reasons for producers to raise offers at this time. One is that overall smelter operating rates remain low, as most of the idled smelters still have no plans to restart, and the other is that demand actually improved a bit after the holiday," a Shanghai analyst said, noting that producers are still losing several hundred yuan on every tonne of ferrosilicon they refine, so they have a strong incentive to raise offers.
However, producers and traders have not lifted their export market offers due to a lack of trading activity. "We have kept our offers unchanged as there have been very few sales recently," a source at Erdos Metallurgy Group said.
The average operating rate of smelters in Ningxia, Chinas biggest ferrosilicon production area, reportedly is around 50 percent.