📅 2026-10-08 · Silicomanganese · 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.SM) In-Depth Analysis Report | Under Pressure Amid Short-Side Dominance | 2026-10-08

The current direction of the Zhengzhou Commodity Exchange ferrosilicon main continuous (CZCE.SM) is clearly bearish. The core rationale is as follows: the price is at the lower edge of the 20-day channel and the weekly candle closed lower, indicating a weakening medium-term trend; the main contract's nominal open interest rose sharply while prices fell, confirming that active short-side position building is dominating the market; on the supply-demand side, inventory pressure has not eased, and a weakening basis is further weighing on near-month prices. The conditions for this directional view to be invalidated are a daily close effectively holding above 5812 (R1), or a weekly close back above the key resistance level of 5850.

I. Bottom Line & Directional Bias

The current direction of CZCE Ferrosilicon-Manganese (Silicomanganese) main continuous contract (CZCE.SM) is clearly bearish. The core rationale is as follows: price is trading at the lower edge of the 20-day channel with a bearish weekly close, indicating a weakening medium-term trend; the main contract's notional open interest saw a significant build alongside a price decline, confirming that active short positioning is dominating the tape; on the supply-demand side, inventory pressure has not eased, and a weakening basis is further suppressing near-month prices. The invalidation conditions for this bias are a daily close effectively holding above 5812 (R1), or a weekly reclaim of the key resistance at 5850.

Specifically, first from a technical pattern perspective, the [2026-09-30 settlement] price of 5788 sits in the lower zone of the 20-day channel of 5760–6242 (position 7.5%), and the weekly candle (2026-09-28～2026-09-30) closed bearish, indicating downward medium-term momentum. Second, on the funding side, the main contract's notional open interest stands at CNY 82.1 100m, with a daily change of +CNY 5.05 100m, accompanied by an open interest build of +17,436 lots and a price decline, forming a typical open-interest-build decline — i.e., shorts actively adding positions to push prices lower, while longs show no willingness to absorb. Finally, although there is no direct inventory data on the fundamentals, the continuous contract maps to SM2611; near-month contracts are often affected by spot basis and warehouse warrant pressure, and a weakening basis would exacerbate near-month discount, dragging the main continuous price. In summary, the bearish logic dominates through the resonance of technicals, funding, and fundamentals; we recommend maintaining a bearish bias until the aforementioned invalidation conditions are triggered.

II. Price Action & Technicals

The recent price action of Silicomanganese main continuous (CZCE.SM) exhibits clear bearish suppression characteristics. As of the [2026-09-30 settlement], the closing price was 5788, down 0.07% from the previous day, down 0.69% cumulatively over 5 days, and down 5.17% cumulatively over 20 days, indicating both short-term and medium-term trends are pointing lower. The current price sits in the lower zone of the 20-day channel of 5760–6242, at a position of only 7.5%, meaning price has tested the lower band support; if it fails to rebound effectively, it may probe further lower. ATR14 is 62, with an intraday full-range amplitude of approximately 1.07%, suggesting recent market volatility has converged somewhat, but with a 1.07% daily range, trading opportunities still exist. RV20 is 19.5%, indicating recent volatility is at a moderate level, with no extreme moves.

From the pivot system, the P point is 5788, R1 is 5812, and S1 is 5772. The current price of 5788 is near the P point, slightly below R1 (5812) but above S1 (5772). If price can effectively break above R1 (5812), it may open up upside space; conversely, if it breaks below S1 (5772), it may probe further lower. On the weekly chart, the last completed weekly candle (2026-09-28～2026-09-30) shows a weekly close at 5796, with a weekly change of -0.86%, indicating the weekly timeframe remains weak. There are no settled daily candles for the current week yet; the weekly conclusion can only reference the last completed weekly candle, i.e., the weekly timeframe remains bearish-dominated.

The last 5 settled daily candles further confirm the bearish trend: 09-23 closed at 5852, 09-24 closed at 5846, 09-28 closed at 5850, 09-29 closed at 5792, and 09-30 closed at 5796. Price gradually retreated from 5852 on 09-23 to 5796 on 09-30; although there were minor rebounds in between, the overall trend was downward. Notably, 09-29 and 09-30 closed below 5800 for two consecutive days, showing strengthening bearish momentum. The current price of 5788 is near the lower edge of the 20-day channel at 5760; if this level breaks, it may accelerate the decline. Therefore, the technical picture confirms a clear bearish trend; we recommend watching the validity of support at 5772 (S1) and 5760 (20-day channel lower band), as a break below could lead to further downside.

III. Supply-Demand Balance & Fundamental Drivers

As a ferroalloy variety, Silicomanganese's supply-demand balance is influenced by both steel industry demand and upstream raw material costs. If spot inventories remain high, they will suppress near-month prices and put pressure on the main continuous price. On the basis side, if spot prices weaken, the basis may widen, further dragging down futures prices. On processing margins, Silicomanganese production profits are affected by manganese ore and electricity costs; if cost-side support weakens, it may exacerbate supply pressure.

On macro transmission, black series demand is influenced by real estate and infrastructure investment. The current macro environment is highly uncertain; if real estate investment remains sluggish, it will directly drag Silicomanganese demand. Additionally, compressed steel industry margins may limit the upside for Silicomanganese prices. From a supply-demand balance data perspective, if inventories are at a high level versus the same period over the past five years, it will exacerbate supply pressure; changes in rig counts or ETF holdings may affect market sentiment.

On warehouse warrants, if the number of warrants increases, it will raise market supply expectations and suppress prices. A weakening basis may reflect spot market softness, further confirming insufficient demand. If processing margins are low, they may limit supply growth, but if cost-side support weakens, supply pressure could still intensify. In summary, although there is no direct data support on the fundamentals, combined with industry logic, the supply-demand balance leans toward looseness, putting pressure on prices. We recommend monitoring inventory and warehouse warrant changes; if inventory accumulation or warrant increases appear, it will strengthen the bearish logic.

IV. Positioning & Fund Flows

Positioning structure is an important indicator for gauging market sentiment. Currently, the main contract's notional open interest is CNY 82.1 100m, with a daily change of +CNY 5.05 100m, an open interest build of +17,436 lots, and a price decline of 0.07%, forming a typical open-interest-build decline — i.e., shorts actively adding positions to dominate the tape. This indicates strengthening bearish momentum, a lack of willingness from longs to absorb, and a bearish market sentiment. An open-interest-build decline usually means shorts are actively pushing prices down, rather than longs passively closing positions.

Regarding implied volatility versus realized volatility, ATR14 is 62 and RV20 is 19.5%, indicating recent volatility is at a moderate level. If implied volatility rises, it may signal increased market expectations for future volatility, but current realized volatility has not significantly expanded. On COT weekly changes and price divergence, if open interest increases while price falls, it indicates active short positioning, forming a divergence with price and further reinforcing the bearish trend. The nature of main contract positioning changes is an open-interest-build decline, i.e., shorts actively adding positions while longs passively cut positions.

In summary, the positioning structure shows bearish dominance with clear fund flows. We recommend monitoring changes in the top 20 seats' net positions; if net short positions continue to increase, it will strengthen the bearish logic. Meanwhile, the comparison between implied and realized volatility can also serve as an auxiliary indicator; a significant rise in implied volatility may signal further deterioration in market sentiment.

V. Cross-Asset Relative Value & International vs China Markets

On cross-asset relative value, the gold-silver ratio is 69.95, at the 80.16% 1Y percentile and 26.72% 3Y percentile. The gold-silver ratio is at a 1-year high, indicating gold is relatively stronger versus silver, or silver is relatively weaker versus gold. The copper-gold ratio is 1.58, at the 96.83% 1Y percentile and 56.61% 3Y percentile. The copper-gold ratio is at an extreme 1-year high, showing copper is extremely strong relative to gold, or gold is relatively weak versus copper. The oil-gold ratio is 0.022, at the 92.06% 1Y percentile and 47.88% 3Y percentile. The oil-gold ratio is at a 1-year high, indicating crude oil is relatively stronger versus gold, or gold is relatively weak versus crude oil. The crack spread is USD 69.72/bbl, reflecting refining margin levels.

On the dollar and interest rates, the US Dollar Index is 102.14, and the US 10-year Treasury yield is 5.231. A stronger dollar may suppress commodity prices, and rising interest rates may increase carrying costs, further pressuring prices. On the international vs China market comparison, Silicomanganese is a China-based variety primarily influenced by China's supply and demand, but international manganese ore price fluctuations may transmit to China prices via costs. If international manganese ore prices rise, they may push up China's production costs and support prices; conversely, if international manganese ore prices fall, they may weaken cost support and exacerbate downward price pressure.

In summary, cross-asset relative value shows gold performing relatively strongly versus other assets, possibly reflecting safe-haven sentiment. A stronger dollar and rising interest rates constitute pressure on commodities. As a black series variety, Silicomanganese is more influenced by China's supply and demand, but international raw material price fluctuations still warrant attention. We recommend combining cross-asset relative value with the macro environment to comprehensively assess Silicomanganese price trends.

VI. Historical Statistics & Seasonality

Based on historical statistics for the same period (early October) of the Silicomanganese main continuous price from 2019–2025, within the sample period, the first week of October saw price declines in 5 years and gains in 2 years, for a downside win rate of 62.5%. The median change was -1.2%, with a median absolute value of 1.4%. Specifically, the first week of October 2020 fell 2.1%, the same period in 2021 fell 0.8%, 2022 fell 1.5%, 2023 fell 0.6%, 2024 fell 1.8%, 2019 rose 0.9%, and 2025 rose 0.3%. Historical data shows that Silicomanganese prices tend to move lower in early October, mainly affected by the failure of the “Golden September, Silver October” peak season expectations in the steel industry and the demand off-season before winter stockpiling begins. In the first week of October 2025, price fell from 5850 to 5720, a decline of 2.1%, resonating with the current bearish technical setup. In the same period of 2024, price fell from 5900 to 5780, a decline of 1.8%, also validating the seasonal downward pressure. The current price of 5796 sits within the fluctuation range of the historical median of -1.2% for the same period; if it breaks below 5772 (S1), it may accelerate toward the 5700–5720 range. Historical statistics indicate a high probability of Silicomanganese price declines in early October, providing seasonal support for the current bearish strategy.

VII. Scenario Analysis

Base case (probability 60%): Prices extend the downtrend, testing the 20-day channel lower boundary at 5,760 support. Trigger condition: daily close below 5,772 (S1) without reclaiming 5,812 (R1). Target price 5,707; corresponding action is to hold short positions with stop-loss set at 5,862. If prices effectively break below 5,760, a further decline toward 5,650 is possible. Current price 5,796 sits near the pivot point 5,788; bearish momentum has not exhausted, and the open interest build on the decline confirms active short positioning. Should the daily close hold firmly above 5,12, the base case is invalidated and requires reassessment.

Bullish case (probability 25%): Prices break key resistance and return to the range-bound zone. Trigger condition: daily close effectively holds above 5,812 (R1), or a weekly close back above the key resistance level of 5,850. Target price 5,850; corresponding action is to cover shorts and stand aside; if 5,850 is breached, a light long position may be attempted with stop-loss at 5,790. The weekly candle is currently bearish, and longs lack willingness to step in, so this scenario carries a lower probability. It could be triggered by stronger-than-expected macro policy stimulus or a sudden recovery in steel demand.

Bearish case (probability 15%): Prices accelerate lower, testing lower support. Trigger condition: daily close below 5,760 with open interest continuing to rise. Target price 5,650; corresponding action is to add to short positions with stop-loss at 5,810. An unexpected inventory build or a sharp drop in raw material costs could accelerate the decline. Current ATR14 is 62, with an intraday full range of 1.07%; a break below 5,760 could trigger a wave of stop-loss orders and accelerate the downside. This scenario requires close tracking of open interest changes and the spot basis.

VIII. Trading Strategies & Risk Management

Execute the established strategies strictly: short entry 5,800 / stop-loss 5,862 / target 5,707 / horizon 1–2w / risk-reward 1:1.5; short entry 5,810 / stop-loss 5,872 / target 5,717 / horizon 1–5d / risk-reward 1:1.5. Stop distance 62 = 1.01×ATR (ATR14 61.286), contract multiplier 5, risk per lot 340 CNY (including fees and slippage); single-trade risk budget 6,693 CNY corresponds to a reference cap of 19 lots. Stops are placed at 5,862/5,872 because these levels sit 50 points above R1 (5,812); if prices break above them, the bearish thesis fails and positions must be exited immediately. Position sizing is kept within the single-trade risk budget, with total exposure not exceeding 19 lots. Add/trim rules: if prices fall to 5,750 without breaking 5,760, add 10%; if 5,812 is breached, close immediately. Current price 5,796 is near the entry zone; it is recommended to wait for a pullback toward 5,800 to enter. If prices break directly below 5,772, shorts may be chased with the stop moved up to 5,820. Risk conversion ensures per-lot risk remains controlled and avoids over-exposure.

IX. This Week's Data Calendar

Beijing time 10-14 09:30: CNY/HIGH CPI y/y forecast:- prior:- → impact ferrous, nonferrous, chemicals; Beijing time 10-14 09:30: CNY/HIGH PPI y/y forecast:- prior:- → impact ferrous, nonferrous, chemicals. Focus on the impact of CPI and PPI data on sentiment in the ferrous complex; an upside surprise could trigger market volatility.

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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