Downstream demand continued to be weak, the steel market situation was poor, the magnesium market situation was loose, the ferrosilicon quotation declined slightly again this week, the transaction was not satisfactory, the profit of manufacturers was further compressed, the sentiment was mostly pessimistic, and the production enthusiasm was not high. On the 18th, it was learned that Ningxia Ruizilian has suspended four ferrosilicon furnaces, affecting the daily production of 400 tons. Currently, two furnaces were in production. Driven by the news of production suspension, the Futures market rebounded slightly this week. The opening price of the 2307 contract was 7542, the highest price was 7632, the lowest price was 7376, the closing price was 7566, the settlement price was 7550, the trading volume was 729282, and the position was 216807, an increase of 1.18%. However, under the situation of weak supply and demand, the short-term situation was difficult to improve, and it was expected that the market would still be dominated by weakness in a short term.

Below are Ferrosilicon Futures main contract daily specific performances:

In terms of downstream steel market, according to data from CISA, in the first ten days of May 2023, the daily average production of crude steel in key enterprises was 2.2508 million tons, an increase of 2.0% year-on-year and a decrease of 2.50% year-on-year; The steel inventory of key steel enterprises was 17.6112 million tons, a decrease of 499000 tons or 2.76% compared to the previous month; A decrease of 708800 tons or 3.87% compared to the same period last month; An increase of 4.5368 million tons or 34.70% compared to the end of last year; The social inventory of 5 major varieties of steel in 21 cities reached 11.3 million tons, a decrease of 210000 tons compared to the previous month, a decrease of 1.8%. The inventory continued to decline slightly: an increase of 3.78 million tons compared to the beginning of the year, an increase of 50.3%; A decrease of 1.15 million tons or 9.2% compared to the same period last year. Recently, steel mills have begun to resume production, and crude steel production has rebounded. After the eighth round of decrease of coke price at the raw material end, the first round of increase with 100 CNY/T, the space for decrease at the cost end narrowed, the profit space of steel enterprises shrank, and the spot market price rebounded slightly. However, the demand performance was poor, and the transaction was still less than expected. The industry mostly held a wait-and-see attitude towards the future market, and the steel market was expected to continue to operate in a volatile manner in the short term.

In terms of metal magnesium, this week the domestic magnesium market was initially stable and then loose. Although some manufacturers have started to stop production due to relevant policies, the overall supply side was stable and has not had a significant impact on prices yet; Moreover, due to poor downstream demand, with light transactions and a majority of wait-and-see situations, resulting in a slight easing of magnesium prices under pressure. Under the uncertainty of the supply side and the weak demand pattern, it was expected that the short-term either rise or fall of magnesium prices would be limited, and consolidation operation would be the main trend. On Friday, May 19th, the mainstream ex-factory cash quotation including tax of 99.9% magnesium ingots in Fugu area was mostly about 25500 CNY/T.