Chinese manganese alloy market declines, ferrosilicon recovers

On the heels of lackluster demand in the Chinese manganese alloy market, market quotations have continued to move down slightly during the week ending June 8. In the coming period, domestic manganese alloy producers may continue to idle further production capacities. Meanwhile, China's ferrosilicon market has indicated minor upticks in the week in question.

In the past week, the market quotations of FeMn65Si17 have been at RMB 8,200-8,300/mt ($1,202-1,217/mt) in the north of China, while market quotations of the same material in the southern region have been at RMB 7,900-8,100/mt ($1,158-1,188/mt). The upper ends of both price ranges have indicated a decrease of RMB 100/mt (15/mt) compared with the previous week. At the same time, the mainstream price of FeMn65 has been standing at around RMB 8,100-8,300/mt ($1,188-1,217/mt), down RMB 100/mt ($15/mt) week on week, while export offers of FeMn65Si17 have remained at $1,500-1,550/mt FOB.

Due to lack of sufficient bookings, most manufacturers have reduced their offers for manganese alloy products during the week in question. Some producers suffering from inventory pressure are now considering halting production in order to carry out overhaul work. Market players expect that the prices of manganese alloy products will go down further in the short term.

In the past week the ex-factory price of ferrosilicon (75 percent) has been at RMB 6,700-6,900/mt ($982-1,012/mt) in northwestern China, up RMB 100/mt ($15/mt) week on week. In addition, export quotations of domestic ferrosilicon (75 percent) have remained at $1,430/mt FOB, increasing by RMB 30-50/mt ($4-7/mt) compared with the previous week.

Although domestic market activities have been running at a pretty slow pace, ferrosilicon prices in China have trended up slightly. During the whole week, a waiting atmosphere has prevailed in the market. Now that electricity charges in the main domestic ferrosilicon producing regions look certain to be raised, with only the extent of the increase to be revealed, some large producers are waiting to make further price increases, while some small and medium sized enterprises have been obliged to halt production. After the recent price revisions by domestic producers, ferrosilicon prices have indicated small increases as compared to last month. However, as current market prices have not reached anticipated levels, producers are still likely to incur more losses. On the export side, overseas buyers are at present waiting for offers to gain greater clarity.