Tight availability boosts China’s manganese alloy market

Over the past week the Chinese domestic common alloys market has continued its rising trend, especially in the manganese alloy market. Since alloy producers are limiting their production due to the serious drought in the southwestern region, and also owing to the high price levels of manganese, the manganese alloy market continues to indicate a significant rise. Meanwhile, a slight price increase has been seen in the domestic ferrosilicon market due to the high cost levels.

In the past week, the prices of manganese alloys have continued their upward trend in China's domestic market. Market quotations of FeMn65Si17 have been at RMB 8,100-8,400/mt ($1,188-1,232/mt) in the south of China, marking an increase of RMB 100-200/mt ($15-29/mt) week on week; at the same time, the mainstream price of FeMn65 in the south has increased by RMB 150/mt ($22/mt) to RMB 8,100-8,300/mt ($1,188-1,217/mt), while export offers of FeMn65Si17 have remained at $1,450-1,500/mt FOB.

Due to increased demand and tight supplies in the southwestern region, a price increase has been observed in the overall domestic manganese alloys market. In recent days, domestic mills announced their new purchase prices for silicon manganese, following which an increase in purchase volumes was registered. Liaoning-based Anshan Steel raised its purchase price for silicon manganese for April to RMB 8,600/mt ($1,261/mt) while steelmakers in other regions have upped their purchase prices to RMB 8,400-8,500/mt ($1,232-1,246/mt). The increased demand from steelmakers is the main driving force pushing up the price of manganese alloys. Meanwhile, with the drought continuing in southwestern China, most manganese alloy producers in Guangxi, Guizhou and Yunnan have been operating at reduced rates. Currently, most steelmakers in the southwest have halted production, while mills in the north are producing at high cost levels, all of which results in a general tightness of availability in the domestic manganese alloys market.

Over the past week the ex-factory price of ferrosilicon (75 percent) was RMB 6,050-6,150/mt ($887-902) in northwestern China, up another RMB 50/mt ($7/mt) compared with the previous week. In addition, export quotations of domestic ferrosilicon (75 percent) have increased to $1,300/mt FOB.

During the week in question, China's ferrosilicon market has witnessed general confusion regarding market prices, with a significant price hike observed in the Ningxia market. It is heard that a large steelmaker in Jiangsu Province has raised its ex-mill price for ferrosilicon (72 percent) to RMB 6,600/mt ($968/mt), up RMB 150/mt ($22/mt); meanwhile, Hebei-based Hegang Group is expected to raise its price by RMB 100/mt ($15/mt), and other steelmakers may raise their ex-works prices by RMB 100-150/mt ($15-22/mt). Looking at the current market situation, it seems that ferrosilicon price increases are here to stay for the month of April.