International trade futures: double silicon price is expected to decline in 2024
The so-called cold weather begins with frost’s descent, often this solar term to the start of winter is the fastest decline in temperature in a period of time, the current ferroalloy industry is also quite appropriate. In the context of overcapacity, the landing of the two-part price reform of coal and electricity and the expansion of the installed scale of new energy have ensured the stable supply of electricity and promoted the long-term decline of electricity prices, and the alloy production has benefited from it, and the production rhythm will continue to be controlled by profits.
In addition, although the probability of return of the steel industry’s administrative production limit is not large, in the real estate downturn cycle, molten iron began to flow from building materials to industrial materials, which is a big test of the demand for alloys, and manganese silicon is difficult to continue to have the support of national reserves. Therefore, stable supply, real estate decline, and cost finding will be the key words of the 2024 silicon fundamentals.
In the long term, with the opening of new production capacity applications in the main producing area of Inner Mongolia, it will intensify the volume of the industry, and the impact on the end of 24 to 25 years will be more obvious. The price center of gravity of silicon or gradually tilt to the low electricity price area, with the emergence of the survival of the fittest phenomenon, the disk target also tends to shift from the current Ningxia to Inner Mongolia, we also boldly predict that the monthly low point of the disk will be near the average spot cost of Ningxia and Inner Mongolia for most of the 24 years.
Then, it is still too early to look at the industry with an optimistic attitude, and it is expected that the price of silicon in 2024 will be lowered, which can be used as a blank allocation within the plate or a blank opportunity to pay attention to the mainstream steel mill price announcement in the month. The trend or will continue to follow the cycle of cost side carbon element sentiment, the bull market will also wait until the time of stage cost support and supply and demand margin contraction, the reference indicator is the social inventory, the industry needs to wait for the end of winter.
Ruida futures: The cost fluctuates around the year before high and after low
Looking forward to 2024, in terms of supply, with the release of new production capacity in the Inner Mongolia production area, manganese silicon production will continue to increase, iron silicon manufacturers are not willing to raise production in the case of average profits, coupled with the impact of energy consumption control policies on double silicon production areas, iron silicon production or overall stable, in the downstream industry seasonal consumption characteristics, the supply level of double silicon in the first half of the year is expected to be higher than the second half of the year.
Demand, overcapacity is still the background of the steel industry, limited production policy on crude steel water production also has certain restrictions, coupled with steel mills, demand release space is not much, specifically, the first quarter of the financial force is expected to be strong, there are also a number of meeting window period, the plate is expected to have a strong boost, after the second quarter of the seasonal consumption characteristics of the plate began to affect the supply and demand of the industrial chain, The specific alloy demand is mainly concerned with the implementation effect of the phased steel move and the macro benefits in 2024 in the industrial chain, and whether the pressure of the charge to the warehouse is effectively alleviated.
On the macro side, the Federal Reserve or end the interest rate hike cycle into the interest rate cut, the external risk weakened, the domestic continued to inject momentum for stable economic development, domestic demand is expected to further improve, the macroeconomic level of economic vitality increased, or to a certain extent to alleviate the weakness of silicon. It is expected that the main contract of double silicon futures in 2024 will fluctuate near the cost, with stage steel as the upper limit and cost as the lower limit, showing a “N” shape trend of high before and low after the whole year, and the manganese silicon operating range reference 6100-7600 yuan/ton, and the ferrosilicon operating range reference 6200-8000 yuan/ton.
Galaxy Futures: Iron alloy supply and demand will not change too much
Macro: Economic stimulus and environmental protection policies will affect ferroalloy supply and demand. In 2024, the drag of real estate on steel demand will be reduced, but because there is no new economic growth point, total steel consumption is expected to increase only slightly. Environmental policies are expected to dampen supply growth, but not by much.
Market: In 2023, the market was in a state of choppy downswing, and after a small rally in September, prices continued to fall and hit a new low for the year in December. At present, the market expectations are not too optimistic, light transactions, mainly based on on-demand procurement and scheduling production; Both supply and demand fell, maintaining a relative balance, and the price remained weak and volatile.
Outlook: In 2024, as the real estate is still expected to be mainly destocked, the demand is not likely to increase significantly; Although supply will be inhibited by environmental protection policies, the release of new capacity will continue, and supply is expected to remain at a high level, so the change in supply and demand will not change much. In terms of price, the ferroalloy price is greatly affected by the steel price, the steel price often depends on the profit level of the steel mill, it is expected that the profit of the steel mill will not change too much next year, there is no possibility of substantial efficiency increase, so the ferroalloy steel price will also be difficult to have a big improvement. On the whole, building a bottom in 2024 or will be a “long way to go”, and the price will be “up and down and seeking”.
Huachuang futures: double silicon or a declining triangle tail path
Looking back at 2023, for silicon, it is a year full of demand recovery expectations, but the reality has failed. Price and volatility “double drop”, of which manganese silicon down months for up to 7 months, iron silicon down months for up to 10 months, and the volatility of both showed a synchronous contraction. The main contract price of manganese silicon fluctuated about 21% during the year, and the main contract price of iron silicon fluctuated about 26% during the year. In addition, the average daily volume of manganese silicon and iron silicon showed a “scissors difference” trend, but the average daily position of the two increased significantly year-on-year.
Fundamentals: (1) Macro-overview, fixed asset investment in the whole year of 23 was in a downward cycle, and real estate investment was still the main drag, while infrastructure investment and manufacturing investment played an important role in stabilizing the economy. In addition, in view of the economic form of 24 years, at the Central Economic Work Conference in December 23, the overall requirements and policy tone of 24 years of economic work were put forward, emphasizing that “we should adhere to the principle of seeking progress in stability, promoting stability with progress, and first standing before breaking”. (2) ferroalloy supply and demand situation, 23 years in the main theme of “stable economy”, silicon is less disturbed by the supply side policy, and more affected by the negative feedback of the downstream demand side.
Market outlook: Overall, looking forward to the market trend of manganese silicon and ferrosilicon in 2024, the author believes that the 24-year double silicon price or out of the “decline triangle” tail path, but how the final price fluctuations need to pay attention to the actual dominant logic of double silicon.
