SunSirs: With the Supply and Demand Situation Yet to Improve, the Silicomanganese Market May Be Downward Under Pressure

Price trend:

Last week, the silicomanganese market operated within a narrow range, with stable performance and little change in spot prices. Steel mill procurement prices remained around 5,750 RMB/ton, indicating significant cost pressure. Short-term upward potential is expected to be limited. On the cost side, electricity prices in Inner Mongolia remained relatively stable, and chemical coke prices showed no significant fluctuations last week after a decline the week before. Manganese ore prices remained firm, with rising overseas quotations, providing decent cost support for alloys. According to data from SunSirs Price Analysis System, the market price of silicomanganese (specification: FeMN68Si18) in Ningxia last weekend was around 5,5470-5,550 RMB/ton, with an average market price of 5,500.00 RMB/ton, a 0.47% increase compared to the previous week.

Influencing factors

Supply side: Last week, some new production capacity in Inner Mongolia is expected to start producing iron by the end of the week. Another new capacity project planned for mid-month had been delayed until the end of the month, with the exact start date yet to be determined. Factories in Ningxia were temporarily operating normally, although some manufacturers were still undergoing maintenance. silicomanganese inventories remained high, leading to significant cost and capital pressure, slow sales progress, and manufacturers operating under considerable pressure.

In the southern region, due to recent increases in electricity prices for spot transactions in the Guilin area, some factories experienced temporary shutdowns, resulting in a slight decrease in production.  There have been reports of potential electricity price reductions in Guangxi and Guizhou, but no official documents had been released yet. The situation requires monitoring of the implementation of specific policies and subsequent factory production plans.

Since December, despite widespread losses among silicomanganese producers and a weakening willingness to produce, the reduction in output in major production areas had been limited, and supply pressure had not eased significantly. According to statistics, last week the operating rate of silicomanganese enterprises nationwide was 35.61%, a decrease of 1.24% compared to the week before last; the average daily output was 26,890 tons, a decrease of 145 tons.

Although silicomanganese production weakened, industry imbalances had not eased. Inventory reduction pressure had increased in various regions, and neither end-users nor traderswere willing to increase their inventories. Inventory was further concentrating at the production end, highlighting the persistent inventory reduction pressure on manufacturers. According to incomplete statistics, as of December 19th, the national silicomanganese inventory was 384,500 tons, a 3,500-ton increase compared to the previous period. This includes: Inner Mongolia 65,000 tons (up 1,500 tons); Ningxia 291,000 tons (up 5,500 tons); Guangxi 11,000 tons (down 1,000 tons); Guizhou 6,000 tons (down 500 tons); Shanxi, Gansu, and Shaanxi 5,000 tons (down 1,500 tons); and Sichuan, Yunnan, and Chongqing 6,500 tons (down 500 tons).

Upstream cost side: Last week, the manganese ore market at Tianjin Port remained firm and stable.  Looking at different varieties, the price support for oxide ore weakened slightly compared to the previous period, with mainstream transactions showing a slight decrease of around 0.2 RMB/ton. South African manganese ore strengthened last week, with overseas quotations higher than spot transaction prices, leading to increased market support for higher prices. Mainstream quotations for semi-carbonate ore at Tianjin Port were 34.5-35 RMB/MTU, South African high-iron ore quotations varied from 29.5-30.5 RMB/MTU depending on specifications, Gabonese ore was in the range of 42.5-43 RMB/MTU South32 Australian ore was 41.2-41.5 RMB/MTU, and CML Australian ore was around 43.5 RMB/MTU.

Due to inventory accumulation, manganese ore prices at Qinzhou Port have softened, particularly for semi-carbonate ore. Previously, low inventory levels and attractive profit margins compared to forward prices led to strong market demand. However, recent concentrated arrivals of semi-carbonate ore have caused a rapid increase in inventory, coupled with weakening demand, resulting in a price decline. Semi-carbonate ore prices at Qinzhou Port are currently around 35.5-36 RMB/MTU, while high-grade oxide lump ore prices remain firm and high: Australian lump ore at 41-42 RMB/MTU, Australian fines at 35-36.5 RMB/MTU, and South African high-iron ore at 30.5-31 RMB/MTU.

In the international market, UMK announced its January 2026 manganese ore price for China, quoting Mn36% South African semi-carbonate manganese ore at US$4.15/MTU, an increase of US$0.05/MTU compared to the previous price. NMT also released its January 2026 manganese ore price for China, quoting Mn36% South African semi-carbonate manganese ore at US$4.15/ton, an increase of US$0.05//MTU compared to the previous month's price.

Demand side: According to relevant statistics, the average daily crude steel output of key steel enterprises in early December 2025 was 1.869 million tons, a 2.8% increase from the previous ten-day period and a 7.7% decrease year-on-year.

Regarding steel mill tenders, it is reported that a steel mill in East China has finalized its latest silicomanganese alloy tender price at 5,750 RMB/ton (acceptance payment), a 20 RMB/ton increase compared to the previous tender, with a purchase quantity of 2,500 tons. A certain group announced its December silicomanganese alloy tender results: Heilongjiang region purchased at 5,870 RMB/ton (10,800 tons); Jilin region at 5,820 RMB/ton (1,200 tons); Fushun region at 5,770 RMB/ton (5,300 tons); Shanxi region at 5,670 RMB/ton (2600 tons); Chengde region at 5,670 RMB/ton (2,800 tons). All prices were tax-inclusive and based on acceptance payment. It is also reported that Zhongtian Nantong plans a new round of silicomanganese tenders for 5,000 tons; Yuxi Xianfu plans a new round of silicomanganese tenders for 1,500 tons; the tender results are yet to be announced.

Market Outlook

Overall, although improving market sentiment has led to a rebound in silicomanganese prices from their lows, limited supply contraction and persistently weak demand mean that the industry's supply-demand balance has not yet improved, and the pressure to reduce factory inventories remains significant. Given these fundamental factors, SunSirs expects silicomanganese prices to come under renewed pressure and weaken in the short term, with a subsequent stabilization depending on further production cuts by manufacturers.

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