It is reported that Gansu has implemented new preferential electricity price recently to encourage production restart. The price for industrial use can fall by as much as CNY 0.08 per KWH. But producers doubt this and still hold a wait and see attitude since the policy is announced in a non-written way.
Most ferrosilicon producers in Baiyin reveal even price cut by 0.04 per KWH can not attract them to come back to the market as the production cost still stays above market prices. Besides, the policy is announced orally with unclear effect duration. As a result, producers are eager for bigger price drop as well as official written document.
Most ferrosilicon producers in Lanzhou have resumed production before February 20th and can not enjoy the preferential price according to the policy. But producers claim it is not easy for them to restart production so as to maintain social stability, hence they will strive for the preferential price and the negotiation with the government is now under way.
Although some small producers have also restarted operation before February 20th they are not as influential as those big ones, hence the electricity price adjustment is meaningless for them. They now mainly sell 75# ferrosilicon at CNY 5,500 per tonne and 72# FeSi at CNY 5,300 per tonne. However, ferrosilicon is expected to fall owing to electricity price cut.
Details of the adjustment have not been published yet. In the meanwhile it comes a bit strange as Inner Mongolia, Gansu's neighbor, has just removed preferential electricity price. Producers believe they can only foresee future trend after a period of wait-and-see as well as further negotiation with the government. – Mysteel.net
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