China Ferrosilicon Market: Futures Strengthen Post-Holiday Amid Policy Update and Lower Semi-Coke Prices

In the first trading week after the Spring Festival holiday, ferrosilicon futures prices gradually strengthened, supported by improving sentiment.

Two key developments influenced the market:

1. The Shaanxi Provincial Development and Reform Commission issued a Notice on Further Improving Differential Electricity Pricing, stating that from July 1, 2026, enterprises in 25 key industries — including ferroalloy smelting and electrolytic aluminum — with energy efficiency below benchmark levels will be subject to an additional 0.1 CNY/kWh (~0.014 USD/kWh) electricity surcharge.
2. Semi-coke prices declined by 50 CNY/ton, with minor grades now assessed at 685 CNY/ton ex-works (~98 USD/ton).

During the holiday period, factory production remained relatively stable. Significant hedging activity before the holiday meant many companies focused on fulfilling post-holiday orders, resulting in lower inventory accumulation compared with previous years.

Raw Materials

• Silica (Qinghai & Ningxia): 160–200 CNY/ton (~23–29 USD/ton)
• Semi-coke (small size, Shenmu/Fugu, EXW):
  680–700 CNY/ton (~98–101 USD/ton),
  ↓40–50 CNY/ton WoW
• Iron oxide scale 70# (Shijiazhuang, Hebei, ex-tax):
  710–750 CNY/ton (~102–108 USD/ton)

Semi-coke’s decline slightly eased cost pressure, though the upcoming electricity adjustment remains a longer-term concern.

Production Costs (Reference Only)

Production costs fell slightly week-on-week, mainly due to lower semi-coke prices.

Market Outlook

While the semi-coke decline provided short-term cost relief, the electricity surcharge policy scheduled for mid-2026 may increase structural costs for high-energy-consuming producers.

With post-holiday order fulfillment underway and inventories relatively controlled, near-term market fundamentals remain firm, and futures performance is likely to guide spot price direction.