China’s manganese alloy market remains weak, ferrosilicon falls significantly

China's manganese alloy market has continued to follow a weak trend in the past week, with market prices sliding down in line with sluggish demand. On the other hand, China's domestic ferrosilicon market has continued to register a significant decline in the past week.

In the past week market, prices of manganese alloys in China have remained on a weak trend. Currently, Chinese domestic market quotations of FeMn65Si17 are at RMB 8,300-8,400/mt ($1,248-1,263/mt), with quotations in southwestern China standing at RMB 8,000-8,200/mt ($1,201-1,231/mt), down another RMB 100/mt ($15/mt) week on week. At the same time, the mainstream price of FeMn65 stands at around RMB 8,000/mt ($1,201/mt), down RMB 200/mt ($30/mt) week on week. Meanwhile, export offers of FeMn65Si17 are at $1,460-1,500/mt FOB, unchanged week on week.

In northern China offers of manganese alloys have remained stable in the past week as compared to the previous month, while in southern China prices have continued to decline. The manganese alloy market is characterized by oversupply, and so steel mills and traders are both sitting on the fence for the time being, with the transaction volume on the low side. There have been few purchases from downstream enterprises, while inventories held by producers have started to increase. Currently, manganese alloy producers are facing increased costs due to high manganese ore prices and increasing electricity prices. As a result, some producers may have to suspend production again.

During the past week, Chinese ferrosilicon prices have continued to slide down. Current ex-works prices of ferrosilicon (75 percent) in China stand at RMB 7,400-7,600/mt ($1,143-1,173/mt), down RMB 200/mt ($30/mt) week on week. In addition, export offers of ferrosilicon (75 percent) from China have also continued to decline slightly week on week, falling to $1,600/mt FOB, with few transactions seen.

In line with the sharp decline in domestic ferrosilicon prices, most market insiders are still not optimistic on the prospects for the ferrosilicon market in the coming period. Recently, ferrosilicon producers in Baotou, Inner Mongolia have resumed production, followed by producers in other markets. As a result, the supply volume of ferrosilicon in the Inner Mongolia market has increased. Looking at the current situation, the producers report good margins. Meanwhile, in the context of the increased supply in the ferrosilicon market and the low purchase volume from downstream enterprises, ferrosilicon prices may continue to decline in the coming period.