New record for ferrosilicon in China. This will most likely be sustainable due to China clamping down on power usage and environmental concerns.
Ferrosilicon futures break through the 10,000 yuan/ton mark and continue to set a new record high
[Ferrosilicon futures broke through the 10,000 yuan/ton mark and continued to set a new record high] Ferrosilicon futures closed above the 10,000 yuan integer mark for the first time, continuing to hit a record high.
On August 27, ferrosilicon futures closed above the 10,000 yuan round mark for the first time, continuing to hit a record high. As of the close, the main ferrosilicon contract rose 2.14% to 10038 yuan.
China Merchants Futures commented that following the announcement by the National Development and Reform Commission and the General Office of the Ningxia Government last week on the severe energy conservation situation in the second half of the year, ferrosilicon entered the expected stage of buying and realized a heavy increase, followed by the orderly electricity use notice in Qinghai on the 20th and Ningxia Energy Conservation on the 22nd. The news about the appointment and the detailed management and control of Ningxia today exacerbated the sentiment of the bulls. The ferrosilicon industry chain has three layers of benefits: the first layer is rising costs, the price of double coke has risen sharply, and the price of blue charcoal hit a new high of 1650, with a cost of +200 compared to the beginning of the month; the second layer is the supply bottleneck, first with nearly 90% production The production capacity of the district is restricted by the two-high policy. After Inner Mongolia has made it clear that 25,000 furnaces will be eliminated next year, the remaining Shaanxi-Qingdao-Ningxia will be suspended for energy-saving review due to the first-level warning of energy consumption intensity. Secondly, Qinghai and Ningxia have limited power and energy consumption gaps. According to production news, Ningxia will formulate a new round of staggered production work plans to reduce energy consumption. In the month and three months, the excess energy consumption will be absorbed, and the rest will be stopped immediately if it exceeds the annual target; the third tier is the redistribution of downstream profits, and the price of magnesium metal has increased by 700 to 23,400 today due to the reduction in production of Shaanxi environmental protection energy consumption verification. , 75# ferrosilicon followed by 300 up to drive the expansion of the 75#-72# spread. On the contrary, the negatives are concentrated on the reduction of crude steel production and the high valuation of the industry. Today, the northwest origin quotations are concentrated in the upper and lower 200 range of 8850, with a disk premium of more than 500 and Ningxia's spot gross profit of more than 2500. We believe that the natural nature of ferrosilicon, which accounts for 90% of its energy costs, has established an appreciation trend under the carbon neutral state policy, and its small industry scale and relatively high concentration, excessive energy consumption in production areas, and independent positioning in the industrial chain are in futures funds. The volatility is magnified under the attention. 01 Contract holdings of 230,000 lots have exceeded the spot volume by more than twice. Unilateral risks under high speculation and high valuation gradually accumulate. The operation recommendation remains unchanged for the multi-silicon-iron-air-silicon-manganese arbitrage portfolio to continue holding. Further reading: Mysteel: Analysis of the impact of repeated production restrictions on the ferrosilicon market
On the evening of the 25th, the market began to circulate a production limit and staggered production schedule in the Zhongwei area of Ningxia. From the table, we can see that the document clearly requires that 4 sets of 25500KVA submerged arc furnaces be stopped again from August 26, 1 A 45000KVA submerged arc furnace (some companies still have incomplete display and need to be added), which is expected to affect the daily production of ferrosilicon 450 tons/day. The document requires all ferrosilicon companies to stop production after the annual energy consumption indicators are exhausted. The document is not yet confirmed.
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