A certain degree of pessimism continued to prevail in China's domestic common alloys market over the past week. Despite the increased prices of manganese alloys, Chinese producers still had only limited profit margins due to the considerable rise in production costs. Meanwhile, the domestic ferrosilicon market moved steadily up in the past week, but most players have a pessimistic outlook as regards the future.
Product name | Specification | Place of origin | Price (RMB/mt) | Weekly change (RMB/mt) | Price ($/mt) | Weekly change ($/mt) |
Silicon manganese | FeMn65Si17 | Guangxi | 6,700 | 100 | 981 | 15 |
Ferrosilicon | FeSi75 | Gansu | 5,250 | 50 | 761 | 7 |
China's domestic manganese alloy producers still failed to see any improvement in their profit margins in spite of the increased prices in the Chinese market during the past week. At present, market quotations of silicon manganese FeMn65Si17 are in the range of RMB 6,600-6,700/mt ($966-981/mt) in the southern regions, while market quotations in the north are at RMB 6,800-6,900/mt ($996-1,010/mt), an overall increase of RMB 100/mt ($15/mt) week on week. Meanwhile, mainstream prices of high carbon ferromanganese FeMn65 have risen slightly to RMB 6,100-6,300/mt ($893-922/mt).
Affected by the reduced spot supplies of manganese ore at the ports as well as by traders' stockpiling activities, prices of imported manganese ore in the domestic market climbed up again during the past week. Currently, market quotations of Australian manganese ore (42 percent Mn) have reached RMB 40-42/mtu ($6-7/mtu) at Tianjin port, while the acceptable price levels for Chinese ferroalloy producers are still below RMB 40/mtu ($6/mtu); as a result, some producers began to halt their purchases and stand aside. Meanwhile, given the brisk demand for silicon manganese, domestic mills have raised their purchase prices to the level of RMB 6,800/mt ($996/mt). However, despite the increased purchase prices, ferroalloy producers are still not happy because the surging prices of imported manganese ore have hurt their slim profit margins.
With regard to ferrosilicon, the domestic market registered a minor rise against the background of the slight recovery in trading activity; however, many market players remained in wait-and-see mode throughout the past week and are fairly pessimistic as regards the future. The ex-factory prices of ferrosilicon (75 percent) in the northwestern regions are up by RMB 50/mt ($7/mt) to the range of RMB 5,200-5,300/mt ($761-776/mt), while domestic ferrosilicon is still offered at around $1,050-1,100/mt FOB for the export market.
Certain improvements have been recorded in the sales of large-scale ferrosilicon producers, on the back of the many orders these producers have received from mills in recent days. Nevertheless, medium and small-scale producers are just managing to break even with normal levels of sales. As a result of upward adjustment made to oil prices, the purchase prices of domestic mills have been raised by a certain margin, but ex-factory prices of ferrosilicon have remained constant. Generally speaking, ferrosilicon prices still have limited room for further ascension. It is expected that the Chinese ferrosilicon market will maintain a general stability in the coming week, with a slight expansion in market trading.