Chinese Ferro Silicon Prices Increase Due to Higher Power Prices

Posted in Industry News on 9th December 2011 |

Ferro Silicon Prices within China have risen in response to last weeks increase in energy tariffs of approximately 0.03 yuan per kWh.

Producer's costs have risen by more than 300 yuan per tonne and they are looking to pass a large part of this cost onto customers. However, the recent uncertainty in metallurgical commodity markets like Ferro Silicon is proving difficult for producers to overcome buyer resistance to higher metals prices.

Ferro Silicon production is a very energy intensive process and power costs are the most important factor on producer prices. Historically, investments in large scale Ferro Silicon production and supply are based on the availability of cheap power, very often with hydroelectic or geothermal sources. Chinese producers are also having to absorb the impact of higher environmental standards and export tariffs. However, although this has reduced their international competitiveness, other important Ferro Alloy producing countries such as South Africa have also experienced significant cost and power pressures and China is still a major international supplier of Ferro Silicon.

Tags: China, Energy, Ferro Silicon, Metals Prices