The European ferro-silicon spot market has fallen about 7%, or around 90 euros/ tonne, in June due to weaker demand from steel mills. Demand is likely to soften further in the short term in advance of the seasonal slowdown in Europe in July and August. We believe heavy industry in Europe may take an extended break in the seasonal summer slowdown this year, perhaps a week longer than the traditional two-week holiday in July or August. The summer slowdown is hitting the US market prematurely as well, with steel production slipping, and ferro-silicon prices sliding in response to reduced demand. The Chinese ferro-silicon market has been sluggish in line with demand. Most producers have been busy with long-term contract business and spot trading has been sparse. Producers in Qinghai province said business was thin with traded prices hovering at low levels. Provincial governments are implementing some power price reductions, and these reduced cuts will help producers be more competitive due to cheaper production costs. That said, the industry is facing weak domestic and export demand, as well as black market troubles, to deal with, which should see the market depressed in the near term.
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