Chinese common alloys market still sees slack demand

The Chinese common alloys market has been characterized by an overall weak stability over the past week. Considering the still bearish demand for manganese alloys, most mills have reduced their purchase prices; meanwhile, some regional ferrosilicon producers have begun to sell their materials at low levels given the continuing softness in the domestic market.

Over the past week market prices of manganese alloys in China have remained at the same levels. 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. Meanwhile, mainstream prices of high carbon ferromanganese FeMn65 in the south have remained constant at 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.

Still characterized by an overall slackness of demand, China's domestic manganese alloys market has continued to fluctuate slightly at low levels during the past week. Looking at the current situation, the manganese alloys market is expected to retain its bearish performance in the coming period according to most players. Given the excessive steel production and high inventory, it is quite hard for the domestic steel market to get rid of its current sluggishness, thus making most players generally pessimistic as regards the prospects for the future trend of the manganese alloys market. In addition, manganese ore prices have remained constant in recent days, but there are relatively abundant inventories of manganese ore at the ports; if no improvement is observed in the manganese alloys market in the short term, manganese ore prices are likely to slide down accordingly.

With regard to ferrosilicon, the domestic market has indicated a weak stability throughout the past week. 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.

In the past week China's domestic ferrosilicon market registered a general stability, but some regional producers sold their materials at low prices in order to bring in cash. According to the current situation, market quotations of ferrosilicon are at just around cost price in a context of insufficient downstream demand and relatively low purchase price levels. Since it is said that some mills may carry out further cuts or halt to their production operations, the domestic ferrosilicon market has been bearish. Currently, most ferrosilicon producers have little confidence in the market, but they still seem both reluctant and unlikely to lower their prices further.