永安期货：硅铁向上驱动不足

Core Viewpoint - In the second quarter, the silicon iron market experienced weak price performance primarily due to a downward shift in cost dynamics, with prices dropping from 6000 CNY/ton to approximately 5300 CNY/ton as electricity costs decreased and demand remained weak [1][4]. Supply and Demand Analysis - From June to July, the silicon iron supply side showed a mix of production resumption and maintenance, while downstream demand was weak due to the off-season, leading to a slight weakening of the supply-demand balance [1][4]. - The demand from downstream steel mills remains resilient in the short term, but non-steel demand has shown signs of fatigue, particularly with magnesium production facing profit declines, resulting in maintenance at magnesium plants in Shaanxi and Xinjiang [4]. Cost Dynamics - The mid-term electricity prices are expected to show a stable but slight downward trend, with risks of narrow declines in the cost side [2][3]. - The price of Shanxi lump coal has decreased from 655 CNY/ton to 600 CNY/ton, contributing to the downward shift in silicon iron costs [3]. - The electricity price adjustment in the Ningxia region, which saw a reduction of 0.02 to 0.06 CNY/kWh, significantly impacted silicon iron costs, with expectations of a potential cost reduction of 80 CNY/ton based on projected electricity price declines [3]. Market Outlook - The overall supply pressure may slightly increase due to the resumption of production in the Ningxia region, while some factories in other regions may undergo short-term maintenance due to profit pressures [4]. - The silicon iron market is expected to face a weakening supply-demand balance, with inventory depletion rates likely slowing down [4]. - Despite potential short-term rebounds in silicon iron prices, the combination of weakening supply-demand dynamics and declining costs suggests a bearish outlook for the market [4].