📅 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)

Zhengzhou Commodity Exchange Ferrosilicon Main Continuous (CZCE.SF) In-Depth Analysis Report | Oscillating with Bullish Bias amid Short Covering | 2026-10-08

Based on the current market structure, we maintain a bullish bias on the Zhengzhou Commodity Exchange ferrosilicon main continuous contract (SF2611). The core driver lies in the pre-holiday rally on declining open interest, which signals short-covering momentum, with prices holding firmly above the pivot support level and no weekly breakdown. Although the 20-day decline remains, the short-term technical repair demand is strong, and coupled with supportive macro expectations, prices are expected to attempt a move up toward the upper band of the 20-day channel. The condition for invalidating this directional view is an effective daily close below the key support level of 5924 yuan/ton.

I. Bottom Line & Directional Bias

We maintain a modestly bullish view on CZCE Ferrosilicon main continuous contract (SF2611). This conclusion rests on three core pillars: First, price action exhibits clear short-covering characteristics—main contract notional open interest fell sharply against rising prices, indicating strong willingness among shorts to actively close positions rather than aggressive long-side offensive (offensive positioning). Such a structure typically signals that a near-term correction is approaching its end. Second, on the technical side, price has firmly held above the pivot P level (5982.67), and the last closed weekly candle (2026-09-28 to 2026-09-30) settled at 5,994 points, failing to break below the 20-day channel lower bound of 5,924 points, leaving the technical formation intact. Third, although the 20-day decline stands at -4.22%, recent price volatility (ATR14 101.71) suggests market sentiment is stabilizing, providing room for a price repair.

The invalidation condition is clearly defined: should the daily close effectively break below the key support at CNY 5,924/t, the bullish thesis will be falsified, and we would shift to neutral or re-evaluate. The market currently sits in a sensitive pre- and post-holiday window, requiring close attention to the CPI and PPI releases on October 14 and their potential to disturb sentiment across the black complex.

II. Price Action & Technical Analysis

As of the 2026-10-08 close, the ferrosilicon main contract (SF2611) settled at CNY 6,050/t, up 0.84% from the previous trading day. From a longer-term perspective, the [2026-09-30 settlement] price was CNY 5,982/t, with a cumulative 20-day decline of -4.22%, indicating that medium-term correction pressure has not yet been fully released. However, the short-term technical structure has turned constructive. The current price sits at the 10th percentile of the 20-day channel (5,924–6,624), i.e., near the lower-bound support zone, which typically constitutes a dense cluster of technical buying. The pivot system shows today's pivot P at 5,982.67, 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 price can effectively hold above 6,025.33, it may challenge the 20-day high of 6,624 points.

On volatility, ATR14 stands at 101.71 (1.7%), indicating relatively mild intraday full-range movement and a rationalizing market sentiment. RV20 is 31.2%, showing recent realized volatility at a moderate level with no signs of extreme panic or euphoria. On the weekly chart, the last closed weekly candle (2026-09-28 to 2026-09-30) settled at 5,994 points, with a weekly change of -0.3%; although it closed slightly lower, there was no breakdown, and the weekly trend remains in a consolidation pattern. Notably, among the last five settled daily candles, the 09-30 session rebounded from a low of 5,940 to 5,994, demonstrating strong underlying support. The current price has moved away from the 20-day low of 5,924, and the technical repair need is pressing; we expect a consolidation with a bullish bias in the near term.

III. Supply-Demand Balance & Fundamental Drivers

From a supply-demand perspective, the ferrosilicon market stands at a critical juncture where seasonal adjustment intersects with macro expectations. The current price sits near the lower bound of the 20-day channel, and the open-interest-cut rally suggests the spot market may have digested part of the bearish factors, with supply-demand tensions easing somewhat. The pre- and post-holiday window is typically accompanied by the release of downstream steel mill restocking demand, which may provide support to prices.

On macro transmission, the CPI and PPI data due on October 14 will be significant for black-complex commodities. If the PPI year-on-year reading beats expectations, it could lift overall industrial-commodity sentiment and indirectly benefit ferrosilicon prices. Additionally, the U.S. Dollar Index (DXY) currently stands at 102.14; a weaker dollar would favor USD-denominated commodities, including ferrosilicon. However, caution is warranted: the 20-day decline of -4.22% shows medium-term correction pressure remains, and should macro data disappoint, prices could come under pressure again. Overall, while supply-demand fundamentals offer no significant tailwinds, the combination of technical repair and macro expectations supports the bullish bias.

IV. Positioning & Fund Flows

Positioning analysis shows the market currently exhibits a classic short-covering pattern. Main contract notional open interest stands at CNY 6.15bn, with a daily change of -CNY 719m, corresponding to a reduction of 24,007 lots. Against a price rise of 0.84%, the sharp drop in open interest clearly points to active short closing rather than aggressive long building. Such a rising-price/open-interest-cut structure typically appears at the tail end of a short-term correction, with strong profit-taking willingness among shorts, freeing up room for further price upside.

On implied versus realized volatility, ATR14 is 101.71 and RV20 is 31.2%, indicating moderate market volatility with no extreme moves. This suggests the current positioning structure is relatively stable, with no large-scale panic liquidation or short-squeeze behavior. Overall, the shift in positioning provides strong support for the bullish view, and short-covering momentum may continue to drive price repair.

V. Cross-Asset Relative Value & Global vs China

In cross-asset relative value, the gold/silver ratio stands at 69.95, at the 80.16th percentile over 1 year and the 26.72nd percentile over 3 years. Such an elevated gold/silver ratio typically implies gold is favored over silver, or that safe-haven sentiment is rising. The copper/gold ratio is 1.58, at the 96.83rd percentile over 1 year and the 56.61st percentile over 3 years, showing copper at historically high levels relative to gold, potentially reflecting strong growth expectations. The oil/gold ratio is 0.022, at the 92.06th percentile over 1 year and the 47.88th percentile over 3 years, indicating crude oil is relatively expensive versus gold, possibly due to tight supply-demand conditions.

For ferrosilicon as a black-complex product, cross-asset relative value has a relatively indirect impact. Nonetheless, the elevated copper/gold ratio may imply healthy industrial-demand expectations, indirectly benefiting the black complex. The U.S. Dollar Index (DXY) is 102.14; a weaker dollar would favor commodity prices. Furthermore, the U.S. 10-year Treasury yield (^TNX) is 5.231; a decline in yields would lower financing costs and benefit industrial commodities. Overall, while cross-asset ratios do not directly drive ferrosilicon prices, changes in the macro environment may influence overall black-complex sentiment through capital flows.

VI. Historical Statistics & Seasonality

Based on 2019–2025 historical data, the ferrosilicon main continuous contract exhibits a clear seasonal repair pattern in October. Statistics show that over the past 7 years, the median price gain for the same October period was +2.8%, with a win rate of 57.1%. Specifically, October 2020 rose +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 sits at the 10th percentile of the 20-day channel lower bound, highly consistent with the historical seasonal low zone. From a seasonal volatility perspective, the October average ATR14 is 98.4; the current 101.71 is slightly above the mean, indicating sentiment remains cautious. Historical data show that after October prices break above the 20-day high, the average subsequent gain is +3.5%; the current price has broken above R1 resistance at 6,025.33, consistent with a seasonal breakout pattern. Seasonal statistics support the current bullish view, but the negative return in October 2023 serves as a reminder that macro surprises can alter seasonal patterns.

VII. Scenario Analysis

Base case (probability 60%): Price continues the short-covering logic and holds above 6,025.33, targeting CNY 6,197/t. Trigger condition: daily close effectively holds above 6,025.33 without breaking below CNY 5,924/t. Trading recommendation: build positions in tranches within the 6,025–6,050 range, stop-loss at 5,910.2, target 6,197, horizon 1–2 weeks. If price breaks rapidly above 6,100, add to reach 50% of the target position.

Bull case (probability 25%): If the October 14 CPI/PPI data beat expectations, price could accelerate upward, targeting CNY 6,350/t. Trigger condition: daily close breaks above 6,197 with open interest continuing to decline. Trading recommendation: chase longs after the break above 6,197, stop-loss at 6,080, target 6,350, horizon 1 week. In this scenario, monitor open-interest changes closely; a rising-price/open-interest-build would warrant caution against a reversal risk.

Bear case (probability 15%): If the daily close effectively breaks below CNY 5,924/t, the bullish thesis is falsified and price may probe CNY 5,800/t. Trigger condition: daily close below 5,924 with a sharp increase in open interest. Trading recommendation: close longs after the break below 5,924 and wait on the sidelines for support near 5,800. Strict stop-loss discipline is required in this scenario to avoid deep drawdowns. The current price of 6,050 sits within the base-case range; close attention should be paid to the key support at 5,924.

VIII. Trading Strategies & Risk Management

Established strategies: long entry at 6,025 / stop-loss at 5,910.2 / target at 6,197 / horizon 1–2w / risk-reward ratio 1:1.5; long entry at 5,994 / stop-loss at 5,879.2 / target at 6,166 / horizon 1–5d / risk-reward ratio 1:1.5. Stop-losses are set at 5,910.2 and 5,879.2 because these levels sit below the 20-day channel lower bound of 5,924 and are approximately 114.8 points from the current price, equal to 1.1×ATR (ATR14 104.29), ensuring the stops are not triggered by normal volatility. Risk per lot is 604 CNY (including commissions and slippage); the single-trade risk budget of 6,693 CNY corresponds to a reference cap of 11 lots. Position sizing is recommended at no more than 5% of total capital, with scaling rules as follows: initial entry 50%, add 30% on a break above 6,100, add 20% on a break above 6,197. If price falls below 5,924, close all long positions immediately. The stop distance of 114.8 points is calculated based on ATR14 104.29 to keep risk controlled. Contract multiplier is 5; risk per lot is 604 CNY, and the single-trade risk budget of 6,693 CNY corresponds to a reference cap of 11 lots.

IX. This Week's Data Calendar

These two data releases may significantly affect market sentiment and warrant close attention.

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

Single-name briefs Deep dive

SHFE GoldSHFE.AU 2026-10-08

Shanghai Gold (SHFE.AU) In-Depth Analysis Report | Bullish Bias: Short Covering and Low-Percentile Support | 2026-10-08

Zhengzhou Commodity Exchange Ferrosilicon Main Continuous (CZCE.SF) In-Depth Analysis Report | Oscillating with Bullish Bias amid Short Covering | 2026-10-08

Today's Risk Map

Single-name briefs Deep dive

Previous briefs

⟠ This month's strategy backtest