China’s manganese alloy market remains sluggish, ferrosilicon prices down

China's manganese alloy market has continued to be sluggish overall in the past week. In the southwestern region of China, the production costs of manganese alloy enterprises have continued to move up in line with the rise of electricity prices. Meanwhile, China's domestic ferrosilicon market has declined significantly due to the uncertainty regarding government policy aimed at saving energy and reducing emissions in the western region of China. As a result, the trend of ferrosilicon prices in the coming period remains unclear.

In the past week, market prices of manganese alloys in China have remained stable overall, while market demand has continued to be sluggish. Currently, Chinese domestic market quotations of FeMn65Si17 are at RMB 8,400-8,800/mt ($1,265-1,325/mt), unchanged week on week, with quotations in southwestern China standing at RMB 8,300-8,500/mt ($1,250-1,280/mt), unchanged week on week. At the same time, the mainstream price of FeMn65 continues to remain at around RMB 8,300-8,500/mt ($1,250-1,280/mt), unchanged week on week. Meanwhile, export offers of FeMn65Si17 are standing at $1,520-1,550/mt FOB, unchanged week on week.

The prices of manganese alloys in China have continued to remain at low levels due to sluggish demand, despite rising costs. Meanwhile, the price of electricity will be increased again on December 25 in Yunnan Province, Guangxi Zhuang Autonomous Region, Guizhou Province and Sichuan Province. After the rise in electricity prices, producers' costs will increase by at least RMB 200/mt ($30/mt). On the other hand, demand in the manganese alloy market will continue to shrink in December due to the negative influence of power rationing measures in Guangxi Zhuang Autonomous Region and in Inner Mongolia Autonomous Region.

During the past week Chinese ferrosilicon prices have been weak in general. Current ex-works prices of ferrosilicon (75 percent) in China stand at RMB 8,500-8,600/mt ($1,280-1,295/mt), down RMB 300-400/mt ($45-60/mt) overall week on week. In addition, with the decline of domestic prices, export offers of ferrosilicon (75 percent) from China have also declined to $1,750-1,800/mt FOB, slightly down week on week.

Over the past week, the ferrosilicon market prices have decreased, while offers in Inner Mongolia Autonomous Region have remained firm. Looking at the current situation, the domestic purchase volume from steel mills has declined, resulting in a rise in inventories held by traders and ferrosilicon enterprises. For the time being, room for downward movement still exists in the ferrosilicon market.