Production of ferrosilicon in China in November 2011 was 351,500 tonnes, down by 31.4% MoM from October 2011. Aggregate of production during the eleven month period of 2011 was 5.13 million tonnes, up by 12.3% YoY from 4.57 million tonnes during the same period of 2010.

In the north west of China, the high ferrosilicon output region, production in the month was much lower. Details of production in November 2011 were:

Ningxia: 92,900 tonnes, down by 3.4% MoM
Gansu: 59,000 tonnes, down by 16.5% MoM
Qinghai: 11,000 tonnes, down by 85.8% MoM
Hunan: 70,000 tonnes, up by 10.6% MoM

In China, profitability at ferrosilicon smelters was seriously deteriorated due to low demand and resistance against the price, prompting curtailments and temporary plant closures in October and November, while in the south, production increased with the lifting of power supply restrictions. As a result of the decreases in the northwest and increases in the south set off, October output decrease was only marginal by 2.2%. In November 2011, however the south also started to curtail production due to worsened market situation, therefore November production dropped sharply. The statistics also shows that in the south curtailments were not done so intensively as in the northwest, and some producers like those in Hunan continued to increase output in November 2011.

The market did not seem capable of absorbing the rate rise of power generated at coal fired thermal power plants effective from December 1st 2011, so the profitability deteriorated further, causing the curtailments and the plant closures to spread. Apparently responding to these adjusting moves in production, the market has braked the downward price trend. In several local markets, offers are reportedly already picking up.

(Sourced from TEX Report Limited)