Price trend

As of February 26th, the silicomanganese market maintained a relatively stronger trend. Frequent news regarding manganese ore costs kept ore prices firm, providing strong cost support for alloy producers. Overall market transactions were weak after the Spring Festival, with steel mills not yet initiating large-scale bidding. A steel mill in East China priced its price at 5,800 RMB/ton this week, lower than market expectations, indicating weak willingness to sell. On the 26th, futures prices rose sharply, improving market sentiment, with most industry players adopting a wait-and-see approach. According to data from SunSirs' commodity market analysis system, the market price of silicomanganese (FeMN68Si18 specification) in Ningxia was around 5,550-5,600 RMB/ton, with an average market price of 5,580.00 RMB/ton, a 1.12% increase compared to the previous day.

Influencing factors

On the supply side: Southern factories continued to operate at low capacity. Guilin, Guangxi, enjoyed electricity discounts during the Spring Festival, but few factories benefited from these discounts, resulting in limited production. Southern alloys remained in short supply, leading to low production enthusiasm. In Inner Mongolia, some alloy plants that started production earlier increased their iron output during the holiday, resulting in an overall increase in production.

Upstream costs: The manganese ore market saw prices rise on the 26th, supported by news regarding South African electricity prices and tariffs. Early morning gains in silicomanganese futures boosted traders' willingness to maintain prices. South African manganese ore prices at Tianjin Port saw a significant increase, with semi-carbonated ore prices rising to 37.5-38 RMB/MTU. South32 Australian lump ore prices followed suit, reaching 42.5 RMB/MTU due to increased costs upon arrival. Downstream industries gradually resumed operations, and port inquiries became more active, with overall transaction volume shifting upwards by approximately 0.3-0.5 RMB/MTU.

On the demand side: Around the Spring Festival, some silicomanganese tenders were awarded, with prices concentrated between 5,800-5,850 RMB/ton, leaving limited room for negotiation. Although silicomanganese futures fell slightly after the holiday, the increased costs of manganese ore and electricity made it difficult to procure silicomanganese at low prices.

A large steel group in Hebei Province revealed that due to recent maintenance, there are no plans to purchase silicomanganese in February, but normal purchases will be made in March. In January, the plant purchased 17,000 tons.

The following are some steel mill bidding results for reference only: February 6th, a Fujian steel mill bid 5,790 RMB/ton (based on contract, half cash, half acceptance, including tax, delivered to the plant), with a purchase volume of 12,000 tons. February 9th, a large Jiangsu steel group bid 5,850 RMB/ton (cash, including tax, delivered to the plant), with a purchase volume of 2000 tons. February 11th, a Guangdong steel mill bid 5,830 RMB/ton (based on contract, including tax, delivered to the plant), with a purchase volume of 1,000 tons. February 13th, a Jiangsu steel mill bid 5,825 RMB/ton (acceptance, including tax, delivered to the plant), with a purchase volume of 5,500 tons. February 25th, a Jiangsu steel mill bid 5,800 RMB/ton (acceptance, including tax, delivered to the plant), with a purchase volume of 700 tons. February 25th, a large Jiangsu steel group bid 5,830 RMB/ton (cash, including tax, delivered to the plant), with a purchase volume of 5,000 tons.

Market outlook

Overall, the silicomanganese market remained volatile, with firm manganese ore prices providing effective support for alloy prices. On the supply side, some alloy plants in Inner Mongolia that had started operations earlier increased their iron production during the holiday, resulting in an overall increase in output. Market prices remained stable during the holiday, with manufacturers focusing on fulfilling pre-holiday orders and few new orders being placed. Major steel mills did not initiate procurement tenders before the holiday, and SunSirs predicts that the silicomanganese market will continue its volatile pattern in the short term.

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