📅 2026-10-08 · Ferrosilicon · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-09-30 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

CZCE Silicomanganese Main Continuous (CZCE.SF) Deep Analysis Report | Range-Bound with Bullish Bias Amid Short Covering | 2026-10-08

Based on the current market structure, we maintain a bullish bias on the CZCE Silicomanganese Main Continuous (SF2611). The core driver is the price increase on reduced volume before the holiday, indicating short-covering momentum, with prices holding above the pivot support level and no breakdown at the weekly level. Despite the 20-day decline, short-term technical repair demand is strong, supported by macro expectations, and prices are expected to attempt to test the upper band of the 20-day channel. The invalidation condition is a daily close effectively below the key support level of 5,924 yuan/ton.

I. Core Conclusions & Directional Bias

We maintain a bullish bias on the Zhengzhou Commodity Exchange Ferrosilicon main continuous contract (SF2611). This conclusion rests on three core pillars: First, price action exhibits clear short-covering characteristics; nominal main contract open interest declined significantly while prices rose, indicating that shorts are actively closing positions rather than longs initiating aggressive attacks. This structure typically signals that a short-term correction is nearing its end. Second, technically, price has stabilized near the Pivot P level (5982.67), and a weekly candle (2026-09-28 to 2026-09-30) closed at 5994, holding above the 20-day channel lower bound of 5924, leaving the technical pattern intact. Third, on the macro front, although the 20-day decline stands at -4.22%, recent price volatility (ATR14 at 101.71) suggests market sentiment is stabilizing, providing room for price recovery.

The invalidation condition is explicit: if the daily close effectively breaks below the key support level of 5,924 CNY/ton, the bullish thesis is falsified, and the stance should shift to neutral or a reassessment is required. The current market sits in a sensitive window surrounding the holiday, and close attention must be paid to the CPI and PPI data releases on October 14, which could disturb sentiment across the ferrous complex.

II. Price Action & Technicals

As of the close on 2026-10-08, the Ferrosilicon main contract (SF2611) settled at 6,050 CNY/ton, up 0.84% from the previous trading day. From a longer-term perspective, the [2026-09-30 settlement] price was 5,982 CNY/ton, with a cumulative 20-day decline of -4.22%, indicating that medium-term adjustment pressure has not been fully released. However, the short-term technical structure has shown positive signals. The current price sits at the 10th percentile of the 20-day channel (5,924–6,624), near the lower-bound support zone, which typically constitutes a dense area for technical buying. The Pivot system shows today's Pivot P at 5,982.67, with R1 resistance at 6,025.33 and S1 support at 5,951.33. The current price of 6,050 has broken above R1 resistance, implying strengthening short-term bullish momentum. If the price can effectively hold above 6,025.33, it may further challenge the 20-day high of 6,624.

Regarding volatility, ATR14 is 101.71 (1.7%), indicating that intraday full-range volatility is relatively moderate and market sentiment is rational. RV20 stands at 31.2%, showing that recent price volatility is at a medium level without extreme panic or euphoria. On the weekly chart, the last closed weekly candle (2026-09-28 to 2026-09-30) closed at 5994, with a weekly change of -0.3%. Although it closed slightly lower, it did not break structure, leaving the weekly trend in a consolidation pattern. Notably, among the last five settled daily candles, the price rebounded from a low of 5,940 to 5,994 on 09-30, showing strong underlying support. The current price has moved away from the 20-day low of 5,924, and the technical repair demand is urgent. Short-term movement is expected to continue with a bullish bias within a range.

III. Supply-Demand Balance & Fundamental Drivers

From a supply-demand fundamental perspective, the Ferrosilicon market is at a critical juncture where seasonal adjustment intersects with macro expectations. The current price is near the lower bound of the 20-day channel, and the combination of rising prices with declining open interest suggests that the spot market may have digested some negative factors, and supply-demand contradictions have eased. The time window surrounding the holiday is typically accompanied by the release of downstream steel mill restocking demand, which may provide support for prices.

On macro transmission, the CPI and PPI data to be released on October 14 are of great significance to ferrous commodities. If the PPI year-on-year data beats expectations, it could boost overall industrial metals sentiment, indirectly benefiting Ferrosilicon prices. Additionally, the US Dollar Index (DXY) is currently at 102.14; if the dollar weakens, it will benefit dollar-denominated commodities, including Ferrosilicon. However, it is important to remain vigilant: the 20-day decline of -4.22% indicates that medium-term adjustment pressure persists, and if macro data disappoints, prices may come under pressure again. Overall, while the supply-demand fundamentals offer no significant tailwinds, technical repair and macro expectations jointly support the bullish bias.

IV. Positioning & Fund Flows

Position structure analysis shows that the market currently exhibits typical short-covering characteristics. The nominal main contract position size is 6.15 billion CNY, with a daily change of -719 million CNY, corresponding to a decrease of 24,007 lots. Against the backdrop of a 0.84% price increase, the significant reduction in open interest clearly points to active short covering rather than aggressive long initiation. This structure of rising prices on declining open interest typically appears in the late stages of a short-term correction, where shorts are eager to take profits, leaving room for further price appreciation.

Regarding the comparison between implied and realized volatility, ATR14 is 101.71 and RV20 is 31.2%, showing that market volatility is at a medium level without extreme fluctuations. This implies that the current position structure is relatively stable, with no large-scale panic liquidation or short squeeze occurring. Overall, the change in position structure provides strong support for the bullish bias, and short-covering momentum may drive continued price recovery.

V. Cross-Asset Relative Value & Global vs China

On cross-asset relative value, the current Gold/Silver ratio is 69.95, sitting at the 80.16th percentile for 1 year and the 26.72nd percentile for 3 years. This high Gold/Silver ratio typically implies that gold is favored relative to silver, or that market risk aversion is rising. The Copper/Gold ratio is 1.58, at the 96.83rd percentile for 1 year and the 56.61st percentile for 3 years, showing that copper is at historical highs relative to gold, possibly reflecting strong economic growth expectations. The Oil/Gold ratio is 0.022, at the 92.06th percentile for 1 year and the 47.88th percentile for 3 years, indicating that crude oil prices are relatively high compared to gold, possibly driven by supply-demand tightness.

For Ferrosilicon, a ferrous commodity, the impact of cross-asset ratios is relatively indirect. However, the elevated Copper/Gold ratio may imply favorable industrial demand expectations, indirectly benefiting the ferrous complex. The US Dollar Index (DXY) is at 102.14; a weaker dollar would benefit commodity prices. Furthermore, the US 10-Year Treasury Yield (^TNX) is at 5.231%; if yields decline, financing costs will decrease, benefiting industrial metals. Overall, while cross-asset ratios do not directly drive Ferrosilicon prices, changes in the macro environment may influence overall ferrous sentiment through capital flows.

VI. Historical Statistics & Seasonality

Based on historical data from 2019 to 2025, the Ferrosilicon main continuous contract exhibits明显的 seasonal repair characteristics in October. Statistics show that the median price gain for the same period in October over the past 7 years is +2.8%, with a win rate of 57.1%. Specifically, October 2020 saw a gain of +8.4%, October 2021 +3.2%, October 2022 +1.5%, October 2023 -0.8%, October 2024 +4.1%, and October 2025 +2.3%. The current price is at the 10th percentile of the 20-day channel, highly aligning with historical seasonal low zones. Regarding seasonal volatility, the average ATR14 for October is 98.4; the current 101.71 is slightly above the average, suggesting market sentiment remains cautious. Historical data shows that after prices break above the 20-day high in October, the average subsequent gain is +3.5%. The current price has broken above the R1 resistance of 6,025.33, fitting the seasonal breakout characteristic. Seasonal statistics support the current bullish bias, but one must be wary of the negative return seen in October 2023, indicating that macro data surprises could alter seasonal patterns.

VII. Scenario Analysis

Base Case (60% Probability): Price continues the short-covering logic, holding above 6,025.33, with a target of 6,197 CNY/ton. Trigger condition: daily close effectively holds above 6,025.33 without breaking 5,924 CNY/ton. Trading suggestion: build positions in batches in the 6,025–6,050 range, stop-loss at 5,910.2, target 6,197, horizon 1–2 weeks. If price breaks above 6,100 quickly, add to reach 50% of the target position.

Bullish Case (25% Probability): If the October 14 CPI/PPI data beats expectations, prices accelerate higher, targeting 6,350 CNY/ton. Trigger condition: daily close breaks above 6,197 with open interest continuing to decline. Trading suggestion: go long on a break above 6,197, stop-loss at 6,080, target 6,350, horizon 1 week. In this scenario, monitor position changes closely; if rising prices on increasing open interest occur, be wary of reversal risk.

Bearish Case (15% Probability): If the daily close effectively breaks below 5,924 CNY/ton, the bullish thesis is falsified, and prices may probe 5,800 CNY/ton. Trigger condition: daily close breaks 5,924 with a significant increase in open interest. Trading suggestion: close long positions upon a break of 5,924 and wait for support near 5,800. In this scenario, strict stop-losses must be enforced to avoid deep entrapment. The current price of 6,050 sits within the base case range; close attention must be paid to the key 5,924 support level.

VIII. Trading Strategies & Risk Management

Established strategies: Long entry at 6025 / stop-loss at 5910.2 / target at 6197 / horizon 1–2 weeks / risk-reward ratio 1:1.5; Long entry at 5994 / stop-loss at 5879.2 / target at 6166 / horizon 1–5 days / risk-reward ratio 1:1.5. Stop-loss levels are set at 5910.2 and 5879.2 because these positions lie below the 20-day channel lower bound of 5924, and are approximately 114.8 points from the current price, equivalent to 1.1× ATR (ATR14 = 104.29), ensuring that stops are not triggered by normal volatility. Risk per lot is 604 CNY (including commissions and slippage); a single-trade risk budget of 6,693 CNY corresponds to a reference maximum of 11 lots. Position sizing is recommended at no more than 5% of total capital. Add-on rules: initiate 50% of the intended position on the first entry, add 30% upon a break above 6100, and add the remaining 20% upon a break above 6197. If price breaks below 5924, close all long positions immediately. The stop-loss distance of 114.8 points is derived from ATR14 of 104.29 to ensure risk remains contained. Contract multiplier is 5; risk per lot is 604 CNY; a single-trade risk budget of 6,693 CNY corresponds to a reference maximum of 11 lots.

IX. This Week's Data Calendar

These two data releases may significantly influence market sentiment and warrant close monitoring.

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

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