More than half Chinese FeSi capacity expected to restart

Insiders are betting that the Chinese government will allow between 50% of 70% of the closed ferrosilicon smelters to return to operation by the end of the year. As a result, the market continues to lose steam. On the ZCE, the January contract fell rmb94 to rmb8,816 per mt while the May contract fell rmb38 to rmb7,170. The number of contracts for the January contract went down to only 107,392 and May was an even lower 68,392 contracts traded.

Silicomanganese prices and traded volume also went down.

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Feral Sillycan
Feral Sillycan

From what I have seen, the ZCE has not been indicative of any real numbers during this entire shutdown affair as it pertains to ferrosilicon. Said another way, there is at present a significant rift between the futures market and spot prices. 10000 rmb is really the market price at the present moment and the expectation is that Chinese prices for export will settle in the $1700 FOB range in the medium/short term. There are a lot of confirmed sales in Asia at $1800 and above.