Chinese common alloys market remains soft

The Chinese manganese alloys market has remained sluggish during the past week. Given the relatively high production costs, most producers have halted their operations at the current time and hold out little hope for a recovery in the short term. Meanwhile, China's domestic ferrosilicon market again slid down in the past week, with most players waiting for further developments regarding the cancellation of favorable electricity prices.

As regards manganese alloys, China's domestic market still maintained an overall softness during the past week, with a continuous slide observed in the prices of various products. At present, market quotations of silicon manganese FeMn65Si17 are down by RMB 200/mt ($29/mt) to the range of RMB 6,600-7,000/mt ($966-1,025/mt); meanwhile, mainstream prices of high carbon ferromanganese FeMn65 have declined RMB 300/mt ($44/mt) or so to RMB 6,900-7,200/mt ($1,010-1,054/mt). In addition, export quotations of silicon manganese products are in the range of $1,050-1,150/mt FOB, while high carbon ferromanganese FeMn75 is now offered at $1,350/mt FOB.

With no improvement in the manganese alloys market, the prices of both silicon manganese and ferromanganese have registered a certain decrease over the past week. In recent days many mills announced their purchase prices of silicon manganese and other products for April, with the purchase prices of silicon manganese FeMn65Si17 generally around RMB 6,500-7,000/mt ($951-1,025/mt). Some northern-based silicon manganese producers have said that it is very hard for them to supply materials based on the mills' purchase price levels. With no cost advantage in terms of electricity and manganese ore, the silicon manganese producers have been obliged to suspend operations or carry out overhauling works. In the context of the continuing sluggishness in the finished steel market, mills are exerting strict control over their silicon manganese demand and prices, and so demand levels are unlikely to see any recovery in the short term. In addition, due to the relatively low silicon manganese prices in India and Kazakhstan, China's import volumes from these countries have been increasing.

With regard to ferrosilicon, China's domestic market continued its minor decline during the past week against the background of the thick standoff atmosphere in the current market. At present, the ex-factory prices of ferrosilicon (75 percent) in the northwestern regions are down RMB 100/mt ($15/mt) to the range of RMB 5,500/mt ($805/mt), while domestic ferrosilicon is offered at around $1,100-1,150/mt FOB for the export market.

In the absence of any specific official statement regarding the cancellation of favorable electricity prices for the various regions, most ferrosilicon producers, under sales pressure, have lowered their prices in order to stimulate sales performance, but only to see a weak market response. At present, market quotations of ferrosilicon (75 percent) in Gansu and Ningxia have declined RMB 200/mt ($29/mt) compared with the previous week. Meanwhile, it is reported that some mills have hiked their April purchase prices for ferrosilicon, but generally by a slight margin, contributing to the limited profit range for ferrosilicon producers.