[Ferro-Alloys.com]

The prolonged downturn has once again sparked a sentiment of maintenance and production reduction in production areas such as Gansu, Qinghai, and Ningxia. Production on the supply side has slightly declined, and delivery warehouse inventory has continued to decline, driving a continuous rebound in the Futures this week. The opening price of the 2309 main contract this week was 6986, the highest price was 7190, the lowest price was 6910, the closing price was 7184, the settlement price was 7162, the trading volume was 625691, and the position was 179410, an increase of 2.22%. However, the actual transaction of spot has not shown a significant improvement, and the downstream magnesium market was operating weakly, steel mills continued to maintain a low inventory strategy for raw materials under demand and profit pressure, and manufacturers had a high willingness to sell. The actual supply-demand contradiction of ferrosilicon has not decreased, and whether the market can continue to rise remained to depend on the change of supply-demand relationship.

Below are Ferrosilicon Futures main contract daily specific performances:

In terms of downstream, according to the latest data from the CISA, in early June 2023, key steel enterprises produced a total of 22.3107 million tons of crude steel, with a daily output of 2.2311 million tons, an increase of 6.48% compared to the previous period; In early June, the steel inventory of key steel enterprises was 15.8043 million tons, an increase of 183700 tons compared to the previous period (i.e. late May), a decrease of 1.8069 million tons compared to the same period last month, and a decrease of 2.7431 million tons compared to the same period last year. In the short term, the steel market was still in a stage of weak supply and demand, with high temperatures in many areas having a certain impact on downstream construction and still putting pressure on steel prices; However, the market still had expectations for the implementation of relevant policies in the later stage, and the Futures continued to rise. There was a strong expectation of "not weak in the off-season", and it was expected that short-term steel prices may fluctuate mainly.

Downstream demand was still weak, and the domestic magnesium metal market continued to operate under pressure this week, but the price decline has narrowed. Although magnesium factories had expressed difficulties in operation, downstream procurement was still cautious, and the supply and demand relationship was still relatively loose. In the short term, it was difficult to be optimistic about the magnesium market, and may continue to operate weakly and steadily. On Friday, the mainstream ex-factory cash quotation including tax of 99.9% magnesium ingots in Fugu area was mostly around 20200-20300 CNY/T. Pay attention to changes in supply and demand relationships.

• [Editor:kangmingfei]