SunSirs: Futures Prices Continued to Break to New Lows, and Silicomanganese Market Weakened

According to SunSirs, the silicomanganese market weakened rapidly last week, with futures prices hitting new lows. While steel mills were active in issuing tenders, prices remained sluggish; tender prices fell below 5,900 RMB/ton—well below production cost levels. Although silicomanganese prices were on a downward trend, coke prices moved independently, initiating a new round of increases that raised costs by nearly 300 RMB/ton and placed immense cost pressure on silicomanganese producers. Meanwhile, manganese ore prices continued to fluctuate, making production challenging for factories. Data from the SunSirs commodity market analysis system indicates that by the end of last week, market quotes for silicomanganese (FeMn68Si18 grade) in the Ningxia region ranged from approximately 5,550 to 5,700 RMB/ton, with an average market price of 5,640.00 RMB/ton—a week-on-week decline of 2.12%.

Fundamental analysis

Supply side: Production at alloy plants in Inner Mongolia remained relatively stable last week. Settlement electricity prices hovered around 0.4 RMB/kWh—a slight decrease from April—with some plants reporting high costs and showing limited willingness to accept prices offered in mainstream steel mill tenders. Operations in Ningxia remained steady; apart from a few plants with high inventory levels, most facilities maintained low inventory.

In Yunnan, electricity costs dropped by approximately 0.06 RMB/kWh in June, and around two new plants have resumed production; however, despite the downward trend in electricity prices, some factories report that costs remain higher than spot market prices and plan to wait until electricity rates hit their lowest point in July before restarting operations. In Guizhou, aside from one major plant that returned to full production last week, other factories remain unable to operate due to the burden of high electricity costs.

According to incomplete data, as of June 12, national inventory levels for silicomanganese enterprises stood at 362,000 tonnes, an increase of 6,000 tonnes month-on-month. The breakdown is as follows: Inner Mongolia, 45,500 tonnes (down 1,500 tonnes); Ningxia, 293,000 tonnes (up 5,000 tonnes); Guangxi, 3,000 tonnes (up 500 tonnes); Guizhou, 4,000 tonnes (up 1,000 tonnes); Shanxi, Gansu, and Shaanxi combined, 6,000 tonnes (up 1,000 tonnes); and Sichuan, Yunnan, and Chongqing combined, 10,500 tonnes (unchanged).

Upstream Costs: Trading for manganese ore at domestic ports remains under pressure, with prices currently locked in a narrow, stagnant range. As the downstream silicomanganese futures market weakens, the tug-of-war between upstream and downstream sectors has intensified; spot transaction prices have edged lower, with some sales occurring at the lower end of the price spectrum. Overall, the scope for fluctuation is limited, resulting in a volatile trend where prices face resistance in both directions.

Data shows that at Tianjin Port, Australian lump manganese ore is currently quoted at 40–43.5 RMB/MTU, semi-carbonate at 37.5 RMB/MTU, and Gabonese lump at 41–41.5 RMB/MTU; at Qinzhou Port, Australian lump is quoted at 41.5–42.5 RMB/MTU, semi-carbonate at 37–37.5 RMB/MTU, and Gabonese lump at 41.5–42 RMB/MTU.

Regarding demand, steel mill tenders have begun to roll out; confirmed tender prices are currently hovering around 6,000 RMB/ton. Major steel mills have not yet launched their tenders, and most plants are waiting to see how those major tenders play out. HBIS Group set its silicomanganese price for June at 5,980 RMB/ton, following an initial inquiry price of 5,950 RMB/ton. The price for May was 6,050 RMB/ton (compared to 5,650 RMB/ton in June of the previous year).

Pressure from steel mills to drive down prices is intensifying. Recent details regarding silicomanganese tenders from several mills indicate the following: A steel mill in East China finalized its latest tender price at 5,680 RMB/ton (cash, tax-inclusive) for a volume of 3,000 tonnes. A steel mill in Fujian finalized its latest tender price at 5,865 RMB/ton (tax-inclusive, split 50/50 between acceptance draft and cash)—a month-on-month decrease of 215 RMB/ton—for a volume of 9,000 tonnes.

Another steel mill in East China finalized its latest tender price at 5,900 RMB/ton (tax-inclusive, acceptance draft)—a month-on-month decrease of 150 RMB/ton—for a volume of 1,500 tonnes. Additionally, tenders are planned for the following volumes of silicomanganese alloy: Xinyu Steel (4,000 tonnes), Lingyuan Steel (3,850 tonnes), Shanxi Hongda Steel (500 tonnes), and Shandong Iron & Steel Laiwu (2,000 tonnes); the results of these tenders are pending.

Steel mills maintain a certain level of production enthusiasm; relevant statistics show that in early June 2026, the average daily crude steel output of key steel enterprises was 2.083 million tonnes, up 3.8% from the previous ten-day period but down 3.5% year-on-year. On the supply side, with silicomanganese market prices remaining low, the pace of production increases in major producing regions has been relatively slow.

Market Outlook

Overall, cost factors for silicomanganese show divergent trends: coke prices have seen successive recent increases, whereas manganese ore prices have consolidated with a slight downward bias, weighed down by the sluggish silicomanganese market and a distinct downtrend in futures prices; consequently, the marginal cost of silicomanganese production has risen recently. Regarding production, the onset of the high-water season has prompted some southern producers to resume operations, though operating rates in regions like Guangxi remain low; meanwhile, some northern plants have halted furnaces for short-term maintenance, yet the northern region maintains high overall supply levels and faces some inventory pressure. On the demand side, steel mill operating rates and hot metal output remain at relatively high levels, with key mills increasing their silicomanganese procurement. SunSirs anticipates that the silicomanganese market will likely continue to operate with a generally weak tone in the short term.

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