Chinese production of Silico Manganese reversed down from October’s 70-month high in November to settle at a six-month low of 878,498 MT, representing a substantial decline of 10.8% or 106,600 MT month on month, according to Mysteel’s latest monthly survey among the 121 Silico Manganese smelters that host almost all the country’s Silico Manganese capacity.
Behind the retreat was the fact that many Silico Manganese smelters in North China have cut production on their own initiative in response to the sharp fall in Silico Manganese prices. At the same time, some small smelters in South and Southwest China also reduced their output or even halted production entirely after having consumed their in-house manganese ore stocks, according to Mysteel’s analyst responsible for the monthly survey. “Given that the smelting costs are high while selling prices are low,” he explained.
Thus, during last month, Silico Manganese output across China’s five major production bases all slipped to varying degrees, Mysteel Global notes. Among them, Ningxia Hui Autonomous Region and Guangxi Zhuang Autonomous Region saw the sharpest falls last month, with their production dropping by 22.7% and 11.2% respectively, the survey showed.
However, China’s Silico Manganese market is still struggling with oversupply, which is dragging down sales prices of the ferroalloy. “Currently, (Silico Manganese) production is still very high, in contrast with the stagnant demand from steelmakers,” a market source in Central China’s Henan province commented.
The demand from steel producers remains at a relatively low level under the pressure of slowing steel consumption, though demand has seen some improvement so far in December, Mysteel Global notes.
For instance, Hebei Iron and Steel Group (HBIS), a leading Silico Manganese buyer in North China’s Hebei province, plans to purchase 26,000 MT of Silico Manganese for December, higher by 1,390 MT from the tonnage it bought in November though still much lower than the 29,990 MT it bought in December 2018, another Mysteel survey showed.
But after their brief rebound in mid-November, domestic Silico Manganese prices are again tracking downward, Mysteel’s database shows, with that for 6517 grade Silico Manganese in North China, for example, reaching Yuan 5,850/tonne ($831/t) EXW and including the 13% VAT as of December 4, down Yuan 375/MT from the end of October.
This article has been published under article exchange agreement between Mysteel Global and SteelMint.
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