Price trend

The silicomanganese market experienced volatility last week, with futures prices declining significantly and spot quotations remaining low, reflecting a prevailing wait-and-see attitude. On the one hand, the August steel bidding provided certain support to the recent silicomanganese prices, and the superimposed costs were relatively strong. On the other hand, downstream demand was still weak, and the silicomanganese pattern was still in a weak state. Data from the SunSirs Commodity Market Analysis System showed that silicomanganese (FeMN68Si18) prices in Ningxia were priced at around 5,650-5,800 RMB/ton last weekend, with an average price of 5,784 RMB/ton, a slight decrease of 1.53% from the beginning of the week.

Factors Influencing

Supply: Market operating rates continued to rise last week due to some profit margins at factories. This was particularly evident in Ningxia, northern China, where some factories were switching from high-quality silicon to standard silicon. Inner Mongolia factories experienced minimal production fluctuations, with decent order margins and relatively active operations.

Production continued to increase in southern China, particularly in Guizhou, where factories recently resumed operations, leading to a gradual increase in output. Production was rapidly increasing across the region. Yunnan, with some factories operating at high levels, had also seen new furnaces opened, leading to continued output increases. As of August 22, factories were receiving previous orders and were producing to order, with minimal inventory pressure.

According to statistics, the operating rate of silicomanganese enterprises across the country last week was 46.37%, an increase of 0.62% from last week’s previous week; the average daily output was 30,170 tons, an increase of 590 tons.

According to incomplete statistics, as of August 22, the national inventory of silicomanganese enterprises was 156,000 tons, a decrease of 2,800 tons from the previous month. Among them, the inventory in Inner Mongolia was 45,000 tons, a decrease of 1,000 tons from the previous month; in Ningxia, it was 95,000 tons, unchanged; in Guangxi, it was 4,000 tons, a decrease of 1,000 tons from the previous month; in Guizhou, it was 5,000 tons, a decrease of 500 tons from the previous month; in Shanxi, Gansu, and Shaanxi, it was 3,500 tons, an increase of 200 tons from the previous month; and in Sichuan, Yunnan, and Chongqing, it was 3,500 tons, a decrease of 500 tons from the previous month.

Upstream cost side: The manganese ore market recently fluctuated and weakened, and the manganese ore market followed the downward trend of silicomanganese futures. After the market fell, some market participants quoted low manganese ore prices, resulting in slightly chaotic overall ore prices, mainly in South African semi-carbonate, and the other mainstream ores fell by 0.3-0.5 RMB/ton.

As of August 22, the port clearance in northern ports was at a relatively high level, and the inventory pressure was not obvious for the time being. However, it is expected that the port clearance will gradually show a downward trend at the end of the month, and the inventory pressure will increase accordingly; the manganese ore inventory at Qinzhou Port was stable, the quotations of large companies were firm, and the concentration of supply had further increased. In the short term, the price of manganese ore will mainly consolidate and fluctuate.

Data shows that as of August 22, the price of Australian manganese ore in Tianjin Port was 40-41.5 RMB/ton unit, semi-carbonate manganese ore was 34.5 RMB/ton unit, and Gabon block was 39.5-40 RMB/ton unit; the price of Australian manganese ore in Qinzhou Port was 40-41 RMB/ton unit, semi-carbonate manganese ore was 37-37.5 RMB/ton unit, and Gabon block was 39.5-40 RMB/ton unit.

On the demand side, a steel mill in Southwest China reportedly set its latest tender price for silicon-manganese alloy at 5,870 RMB/ton in cash, with a purchase quantity of 1,500 tons. A steel mill in Central China also set its latest tender price at 5,816 RMB/ton in cash, with a purchase quantity of 3,000 tons. A steel mill in South China also set its latest tender price at 5,898 RMB/ton on acceptance, with a discount, for a purchase quantity of 6,000 tons.

A southern steel mill's latest tender price for silicon-manganese alloy has been finalized at 5,830 RMB/ton in cash, a 270 RMB/ton decrease from the previous round of purchases, for a purchase quantity of 3,000 tons. Another southern steel mill's latest tender price for silicon-manganese alloy has been finalized at 5,830 RMB/ton in cash, with a discount factor.

Future outlook:

On the whole, with the gradual decline in steel prices in some regions, the market sentiment has been weakened. The start-up of various production areas has increased during this period, but the market still had certain expectations for the traditional consumption peak season. Near the end of the month, some steel mills will also start a new round of silicomanganese procurement, while the cost price of alloy plants is still relatively high and they keep queuing orders, which to a certain extent still limits the bargaining space at the bottom of the spot market. SunSirs expects that the silicomanganese market may continue to be weaker in the short term and wait and see the futures trend.

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