Chinese common alloy prices retain declining movement

Over the past week the Chinese manganese alloys market continued its sliding movement, with a general pessimism prevailing in the market. Meanwhile, China's ferrosilicon market has still been characterized by a sluggish trading performance, both domestically and in terms of exports.

China's domestic manganese alloys market has again observed a minor decline in the past week, in the context of a weak trading volume. At present, market quotations of silicon manganese FeMn65Si17 are in the range of RMB 7,200-7,600/mt ($1,056-1,114/mt) in the southern regions, marking a reduction of RMB 100/mt ($15/mt) in high-end prices week on week. Meanwhile, mainstream prices of high carbon ferromanganese FeMn65 in the south have declined RMB 100/mt ($15/mt) to RMB 7,100-7,300/mt ($1,041-1,083/mt), and FeMn65Si17 is now offered at $1,250-1,300/mt FOB for the export market.

Some northern-based mills have recently announced their purchase prices for manganese alloys, generally at the level of RMB 7,600/mt ($1,114/mt). Meanwhile, most southern-based mills have not yet issued their new purchase prices, though market players say the new prices are likely to be in the range of RMB 7,200-7,400/mt ($1,056-1,083/mt). Given the continuing sluggish performance in the finished steel market, some mills have started to cut back on their production, leading to reduced demand for manganese alloys. Some mills with relatively high manganese alloy inventories in hand have even halted their purchasing activity in recent days. Overall, China's manganese alloys market is expected to maintain its slack trading performance in the short term.

With regard to ferrosilicon, remaining on its downward trend, the Chinese domestic market has continued to see sluggish trading activity throughout the past week. The ex-factory prices of ferrosilicon (75 percent) in the northwestern regions are down RMB 100/mt ($15/mt) to 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.

Based on the current situation, an overall softness is expected to continue to be observed in the domestic ferrosilicon market during the National Day holidays (October 1-8). With most players standing aside from trading, some small-sized producers have tried to sell off their ferrosilicon materials in recent days, leading to a drop in deal prices in the market. However, some large-sized producers do not have much inventory in hand and thus seem reluctant to sell materials at low prices. Meanwhile, following the weakening movement in the domestic market, export quotations have also declined by $30/mt or so, but only to see a few takers from Japan and South Korea. During the pre-holiday period, the Chinese finished steel market is likely to retain its mild downward movement, thereby influencing the overall domestic raw materials market.