Ferrosilicon smelters in China have been forced to lower
operating rates due to reduced purchasing by steel mills in
recent months, AMM sister publication Metal
Bulletin has been told.
Operating rates in the
Ningxia autonomous region, the countrys biggest
production base, are at around 40 to 50 percent, market sources
"The current price
from steel mills is very close to producers production
cost or even lower for small smelters," according to one source
at a smelter in Ningxia that shut two of its three furnaces
over the past few months.
Hebei Iron & Steel
Group Co. Ltd., the countrys largest steel mill, recently
cut its August bid price for ferrosilicon with a 72-percent
silicon metal content to 6,100 yuan ($987) per tonne, down 50
yuan ($8.15) from July. The price includes delivery and payment
in the form of an acceptance draft.
"The price is too low
to accept. If it finally sets at this level, more smelters will
consider shutting down," the Ningxia source added.
Large producers might also reduce output if the price
pressure continues. "If steel mills continue to cut prices, I
think we may consider cutting production," an executive from
Erdos Metallurgy Group Co. Ltd. said, adding that its smelters
are currently running around full capacity.
A version of this
article was first published in AMM sister publication Metal