China's domestic common alloys market still retained its slack trend during the past week. Facing the continuous decline in market prices of manganese alloys, some domestic medium- and small-sized producers again had to call a halt to their operations. Meanwhile, China's domestic ferrosilicon market has moved on a stable trend, with demand continuing to be weak.
Over the past week China's domestic manganese alloys market was still characterized by an overall softness, with a continuous slide observed in market prices. At present, market quotations of silicon manganese FeMn65Si17 are in the range of RMB 7,000-7,500/mt ($1,026-1,100/mt) in the southern regions, marking a reduction of RMB 100/mt ($15/mt) week on week. Meanwhile, mainstream prices of high carbon ferromanganese FeMn65 in the south have declined by RMB 100/mt ($15/mt) to RMB 7,000-7,200/mt ($1,026-1,056/mt), and FeMn65Si17 is still offered at $1,250-1,300/mt FOB for the export market.
No improvement has been recorded in China's domestic silicon manganese market in recent days. In the south, although with abundant inventories in hand, most producers have stressed that they will not sell their materials below production cost level. Moreover, some medium- and small-sized producers have halted their production, while large-sized producers with cost advantages have continued to maintain their operations at full capacity. Apart from the orders placed by mills, there have only been a few deals concluded in the recent market. Meanwhile, the northern market has appeared a little bit better in terms of market trading compared with the southern regions. Currently, market quotations of silicon manganese FeMn65Si17 are down to the level of RMB 7,000/mt ($1,026/mt) in Yunnan, Guizhou, Guangxi and some other southern areas. Given the continuing bearishness of the steel market and the fall of steel prices, mills are showing greater caution as regards making purchases of raw materials.
With regard to ferrosilicon, the domestic market has maintained a general stability throughout the past week in a context of sluggish commercial activity. The ex-factory prices of ferrosilicon (75 percent) in the northwestern regions are in 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.
Looking at the current situation, since ferrosilicon prices have again approached production cost levels, the domestic market is unlikely to slump further in the short term. Meanwhile, the trading volume is poor, with many ferrosilicon producers reporting that they have only received limited inquiries from both domestic and export markets. On the whole, it seems difficult for the market to overcome the overall slack levels of demand in the short run. In addition, it is said that electricity prices will rise again in the northwestern regions, although this has not yet been officially confirmed. If electricity prices go up, ferrosilicon producers will have to face even greater pressure from production costs in the future.