China’s ferrosilicon market remains slack

Against the background of sluggish trading activity, China's domestic manganese alloys market maintained its soft trend over the past week, with most mills still waiting for a further slide in market prices. Meanwhile, ferrosilicon prices failed to register a halt in their downward movement, in a context of weakening market demand.

China's domestic manganese alloys market continued its slow decline over the past week. At present, market quotations of silicon manganese FeMn65Si17 are in the range of RMB 7,500-8,000/mt ($1,098-1,171/mt) in the southern regions, though some producers have lowered their quotations to RMB 7,400/mt ($1,083/mt). Meanwhile, mainstream prices of high carbon ferromanganese FeMn65 in the south have declined by RMB 100/mt ($15/mt) or so to RMB 7,200-7,400/mt ($1,054-1,083/mt).

In the past week the Chinese silicon manganese alloys market still maintained its weak performance, with actual deal prices slipping by a certain margin in some regions. Southern-based producers have reported low levels of commercial activity as many local mills have not issued their purchasing plans. Meanwhile, in the north a certain shrinkage has been recorded in the purchasing volumes of northern-based mills. At present, the general purchase prices for silicon manganese alloys in the domestic market are in the range of RMB 7,600-8,000/mt ($1,113-1,171/mt). Due to the high prices of imported manganese ore, the production costs of manganese alloys remain at relatively high levels. Overall, given the bleak prospects for the domestic finished steel market, mills are likely to further lower their purchase prices, and so silicon manganese prices are expected to fluctuate on a weak trend in the short term.

With regard to ferrosilicon, the Chinese domestic market retained its downward movement throughout the past week. The ex-factory prices of ferrosilicon (75 percent) in the northwestern regions are down by RMB 100/mt ($15/mt) week on week to the range of RMB 5,500-5,600/mt ($805-820/mt), while domestic ferrosilicon is offered at around $1,180-1,200/mt FOB for the export market, down $20/mt week on week.

Looking at the current situation, due to the sliding trend of the downstream finished steel market and also due to the increased outputs of northwestern-based producers, China's domestic ferrosilicon market has been characterized by an overall softness in recent days. With great confusion observed as regards market quotations, most enterprises have only received orders from old customers, with few inquiries coming from new customers. In the context of the slack trading performance, the ferrosilicon market in China's northwestern regions registered a continuous decline in actual deal prices during the past week. At present, buyers who are currently not eager to source materials have bought in just small quantities while at the same time waiting for further downward adjustment of market prices in the coming period. As regards the future, most local ferrosilicon producers expect the domestic market to decline further against the backdrop of the mildly fluctuating finished steel market.