1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - The fundamentals of ferrosilicon are currently weak in both supply and demand, with an expected marginal improvement in the future. In March, the price is expected to fluctuate strongly due to improved demand and cost support [2][74]. - For silicomanganese, there was some new production capacity put into operation at the beginning of the year, leading to a slight increase in overall supply. In March, the price is likely to oscillate at the bottom as the profit - loss ratio decreases after the rapid increase in the disk price, and the rumored 15% ecological export tax on manganese ore from South Africa has not been confirmed [2][74]. 3. Summary According to the Directory 3.1 Market Outlook - **Ferrosilicon**: The supply is continuously at a low level. The differential electricity price policy in Shaanxi restricts the output release. The demand is expected to increase as steel profits have recovered and iron - water production is expected to rise in March. The main - producing area electricity prices are stable and slightly strong, and the Inner Mongolia electricity price has increased significantly. The price is expected to fluctuate strongly in March [2][74]. - **Silicomanganese**: There is new production capacity at the beginning of the year, increasing the supply. The demand is expected to pick up as steel profits recover and rebar production is expected to rise seasonally after the Spring Festival. The manganese ore port inventory is at a relatively low level in recent years, and the spot price is firm. Overseas mines' March quotes have a slight increase. However, the rumored 15% ecological export tax on manganese ore from South Africa has not been confirmed, and the price is expected to oscillate at the bottom in March [2][74]. 3.2 Fundamental Situation 3.2.1 Market Review - In February, ferrosilicon futures prices first declined and then rose. The decline was due to the steel demand entering the off - season and the overall black - metal market being in an adjustment period. The subsequent sharp increase was stimulated by the rise in electricity prices at the South African manganese ore end and the so - called "ecological export tax" [7]. 3.2.2 Supply and Demand in March - **Supply**: Silicomanganese (187 enterprises) had a January output of 854,000 tons, a 1.2% month - on - month increase and a 3.7% year - on - year decrease. Some new production capacity was put into operation, and the February output is expected to continue to increase slightly. Ferrosilicon (136 enterprises) had a January output of 437,000 tons, a 3.8% month - on - month decrease and a 7.3% year - on - year decrease. The February output is expected to be basically flat month - on - month and slightly decrease year - on - year [28]. - **Demand**: Iron - water production showed a narrow - range fluctuation in February. On February 27, the daily average pig iron output of 247 sample steel mills was 2.79 million tons more than the previous week. In March, steel profits have rebounded, and according to the blast - furnace maintenance plan, iron - water production is expected to increase slightly. However, if the steel inventory removal speed in March is not ideal, it will restrict the steel mills' resumption of production and drag down the improvement of alloy demand [29][31]. 3.2.3 Inventory - **Alloy factory inventory**: On February 27, the inventory of 60 independent ferrosilicon enterprises was 70,400 tons, a 1,100 - ton decrease from the previous week. The inventory of 63 independent silicomanganese enterprises was 398,000 tons, a 3,500 - ton increase from the previous week. Ferrosilicon inventory is relatively normal, while silicomanganese inventory is high, which suppresses the price [44]. - **Downstream inventory**: Steel mills have carried out phased replenishment in advance. However, due to the relatively low absolute value of steel profits and the available days of inventory being at a relatively high level in the past three years, the subsequent procurement intensity may weaken [44]. 3.2.4 South African Manganese Ore Event - In February, the electricity price in the main - producing areas was stable and slightly strong, with a significant increase in Inner Mongolia. The manganese ore port inventory is about 4.3 million tons, similar to the same period last year and lower than the average level in recent years. The low inventory supports the spot price. The market rumor that South Africa will levy a 15% ecological export tax on manganese ore has not been confirmed [55]. 3.3 Future Outlook and Strategy Recommendations - **Unilateral trading**: Ferrosilicon is expected to fluctuate strongly, and silicomanganese is expected to oscillate at the bottom [3]. - **Arbitrage**: Hold a wait - and - see attitude [3]. - **Options**: Sell put options on rallies [3].