Chinese common alloys market registers a minor rise

China's domestic common alloys market has posted an overall minor upward movement during the past week. Considering the relatively high costs of manganese ore, as well as the increased electricity prices, some manganese alloy producers have raised their quotations; meanwhile, the domestic ferrosilicon market has also moved up by a slight margin against the background of increased electricity prices and difficulties in relation to transportation.

Over the past week market prices of manganese alloys in China have moved up slightly. At present, market quotations of silicon manganese FeMn65Si17 have risen to the range of RMB 7,100-7,400/mt ($1,041-1,085/mt) in the southern regions. Meanwhile, mainstream prices of high carbon ferromanganese FeMn65 in the south are at RMB 7,000-7,100/mt ($1,026-1,041/mt), with FeMn65Si17 still offered at $1,250-1,300/mt FOB for the export market.

According to most manganese alloy producers, the increased cost levels - due to higher electricity prices and the increased prices of imported manganese ore - have been the main factor providing support for the market prices of manganese alloys during the past week, while the trading volume is still too low to be able to drive up the prices of manganese alloys. In the current circumstances, producers have hardly been able to make a profit and some of them have even suffered losses in recent days. Consequently, manganese alloy producers have had to raise their ex-factory prices so as to relieve the pressure they are under. Looking at the current situation, while many production halts are currently observed, producers that have continued to maintain normal operations appear reluctant to sell at low prices given the high levels of their costs. As a result, market quotations in the various regions are likely to go up by a small margin in the near future.

With regard to ferrosilicon, the domestic market has remained on a positive trend throughout the past week. The ex-factory prices of ferrosilicon (75 percent) in the northwestern regions are up by RMB 50/mt ($7/mt) to the range of RMB 5,300-5,400/mt ($777-792/mt), while domestic ferrosilicon is offered at around $1,150/mt FOB for the export market.

During the past week China's domestic ferrosilicon market has seen a minor rise in general quotations. Given the expectations of increased electricity prices and severe weather conditions in the north, most ferrosilicon producers in the northwestern regions have made slight hikes to their ex-factory prices in recent days. According to a large producer in Qinghai Province, electricity prices are expected to see an increase of RMB 0.02-0.03/kwh, representing a rise in cost of RMB 200-300/mt for local producers. As a result, some producers have started to raise their prices tentatively, by RMB 50/mt ($7/mt). In addition, the rainy and snowy weather has also significantly affected transportation. Generally speaking, despite some rising momentum in the domestic ferrosilicon market, end-side demand has remained slack; thus, it is still not clear whether the market will go further up or not.