Chinese manganese alloys market still shows weak performance

The Chinese common alloys market continued its weak trend over the past week. Costs are still high for manganese alloys, though the increases seen in prices of electricity and manganese ore have gradually become less. Meanwhile, domestic demand for ferrosilicon has remained weak overall.

In the past week, the prices of manganese alloys have maintained their declining trend in China’s domestic market. Market quotations of FeMn65Si17 were at RMB 7,800-8,250/mt ($1,144-1,210/mt) in the south of China, marking a decrease of RMB 100/mt ($15/mt) week on week; at the same time, the mainstream price of FeMn65 in the south remained unchanged at RMB 7,900-8,200/mt ($1,158-1,202/mt), while export offers of FeMn65Si17 were at $1,450/mt FOB.

Over the past week, Chinese manganese alloys market has been on a declining trend. At present, manufacturers are finding life difficult due to weak market demand and declining purchase prices from the steel mills. Meanwhile, the prices of electricity and imported manganese ore are still at high levels, with the result that some manganese alloy producers risk incurring losses.

With the slowdown in trading activity, some producers in southwestern China have begun to lower their quotations of manganese alloys, with silicon manganese alloy prices falling to approximately RMB 7,700/mt. As learned from producers in this region, given current production costs, they are now operating at a loss. For the time being, most of these producers are operating with stocks purchased previously at lower prices.

In April and May this year, quotations of manganese lump ore (44 percent) exported by BHP Billiton will be at $7.5/mtu FOB, while manganese lump ore (48 percent) will stand at $8.1/mtu FOB. As for manganese ore, quotations have been almost at the same level as in the past week.

Over the past week the ex-factory price of ferrosilicon (75 percent) was RMB 5,950-6,050/mt ($872-887) in northwestern China. In addition, export quotations of domestic ferrosilicon (75 percent) have stayed at the level of $1,280/mt FOB.

Affected by slack demand in the downstream market, the domestic ferrosilicon market has remained on a downward trend during the past week. At present, purchase prices for March from most Chinese steel mills are at the range of RMB 6,300-6,400/mt ($924-938/mt), down by RMB 100-200/mt ($15-29/mt) month on month. The export market is also weak at the current time.

Meanwhile, it has been learned that the price of electricity in Ningxia Province will is to rise by RMB 0.35/kWh, which will contribute to halts or suspensions of production among ferrosilicon enterprises in this region.