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Currently, the cost losses problem of Ferro Silicon production enterprises from main production areas and further decreasing of start-operation rate is particularly serious; Meanwhile, the spot goods cannot meet the marketing demands. Then it can be inferred that the Fesi price will be increased due to all these phenomena.

1/ Low rate operation; No stock; Spot goods shortage.

Now most of the enterprises cannot meet the marketing demands, and marketing trend is that the supply of Fesi spot goods is unable to meet demands. The overall operation rate of the main production area can only reach about 50%; The production volume can only reach about 250,000 ton per month.

For example, a large production enterprise from Inner Mongolia expressed that the monthly production output had been affected by 30% due to the electric power overhaul, which it will be last about 2 month from June. Now the production schedule has already been arranged till the middle of July. So the supply of ferro silicon is shortage, especially for the 72# Fesi

2. Electricity Powder price has not been decreased in Ningxia.

By the end of May, Electric power preferential policy was negotiated between the producers and the local government, but the electricity power price has not been practicable till now. It is said that the some enterprises can enjoy the 0.02-0.03 rmb/kw policy. This failure result absolutely affected sharply on the enterprises whom planed to restart operation.

3/ Transferred to produce silicon metal due to the sharply losses from main production area

Due to the terrible marketing situation of Fesi in Qinghai & Gansu area,some of these enterprises switched to produce silicon metal, and other inoculants instead of fesi.The fesi production volume has been decreased by 200,000 ton, and drop further.

4/ The stock cannot meet the using demands.

It was known that the stock can only last 7-15 days from most of the steel mills.

From the shortage supply and the growing demands, the ferro silicon price will be increased slightly in the near future

• [Editor:zhangjuan]