[Ferro-alloys.com] Late August came and bids for September ferrosilicon were just around the corner, with price increase of ferrosilicon producers in China. Let us make a rough analysis of whether steel mills would again raise their bidding prices, based on supply and demand.

In terms of production situation of ferrosilicon producers in main production regions: new or expansion projects were seldom in Gansu and Inner Mongolia; there were numbers of ferrosilicon producers being required to conduct residual heat power generation and environmental measures in Haidong and Xining of Qinghai province, which could have some influence over operation rate and output of local ferrosilicon; numbers of larger ferrosilicon furnaces would be gradually put into operation from the end of August in Ningxia Hui Region and the local government had decided to enlarge the number of direct power deals with power plants, together with increase of preferential power price. This would enable the overall operation rate to improve in later period in Ningxia Hui Region. Thus we could assume the supply was likely to remain steady as the current situation.

As for demand from steel mills, generally September and October were hot period for steel market, but the national environmental policies and eradication of excessive capacity would control sudden much improvement of demand for ferrosilicon. September purchase volumes of steel mills were expected to remain steady. Mainstream steel mills including HBIS had kept flat the ex-work prices of their steel products.

Given the current supply of ferrosilicon was in tight status and ferrosilicon producers were still in losses, September purchase prices of ferrosilicon had potential for slight increase in China.

• [Editor:Phillip.Feng]