China's major steel mills began to purchase ferroalloys for July delivery in late June. We learned form steel mills that had completed their purchase that they reduced RMB100/mt on purchase price for July ferrosilicon from June's RMB6300-6400/mt (warehouse tax-inclusive price by acceptance), which was within our expectation. Although purchase price declined, it basically went with mainstream market price. Mainstream FeSi 75# was quoted at RMB5950-6000/mt (USD 962.8-970.9/mt,export duty excluded) and FeSi72# was quoted at RMB5750-5800/mt (USD 930.5-938.6/mt,export duty excluded), both ex-work tax-inclusive price by acceptance.
More steel mills would issue purchase July price for ferrosilicon in these days and we predicted mainstream purchase price for FeSi72# would centralize around RMB6200-6300/mt (USD1003.3-1019.5/mt, export duty excluded).
Summary of mainstream purchase price for FeSi72# in the first half of 2013 was as follows: RMB6700-6800/mt, RMB6800-6900/mt, RMB6700-6800/mt, RMB6500-6600/mt, RMB6400-6450/mt, RMB6300-6350/mt and RMB6200-6300/mt (expected in July).
According to above data, purchase price for FeSi72# reached peak of RMB6800-6900/mt with Chinese Spring Festival in February, when some steel mills even offered RMB7000/mt.Since then the price went down monthly and ferrosilicon enterprises pinned their hopes on the remaining 6 months. Considering overall economic situation, much improvement on ferroalloy price was unlikely, but there was limited space for ferrosilicon to drop continuously, due to tiny profits for ferrosilicon enterprises.