China: Silico manganese prices inch up w-o-w amid tight supply, active demand

• Demand revival, cost pressure support price movement
• Quality focus strengthens high-grade alloy prices

CBC: Chinese silico manganese (Mn:65%, Si:17%) prices inched up by RMB 120/t ($17/t) w-o-w to RMB 5,560-5,830/t ($776-$814/t) exw, including taxes.

Silico manganese prices rose slightly w-o-w due to tighter supply in Inner Mongolia amid power disruptions. Demand improved as steel mills resumed restocking, supported by marked progress on infrastructure projects. New policy incentives for ultra-low emission steelmaking boosted interest in alloys. Export inquiries increased, but actual deals remained limited due to tariff constraints.

Market recap:

Mounting costs on supply tightness: Manganese ore feedstock remained strong, while Gabon’s announcement to adjust mining tax rates raised supply concerns and pushed forward contracts higher. Coke prices have stabilized after a prolonged decline, gradually increasing the production cost of silico manganese.

Electricity costs have become a key variable, with southern regions like Guangxi and Guizhou facing rising power prices amid peak summer demand. While silica supply remains ample, quality differences are driving variations in procurement costs. Additionally, limestone supply has been slightly impacted by environmental inspections, adding modest pressure to smelting costs.

Steel demand up, tariff concerns grow: The steel industry continues to show structural demand patterns, with production of construction steel like rebar increasing notably, while plate demand remains steady. As steel mill profitability improves, there is a stronger focus on alloy quality, expanding the premium for medium- to high-grade silicon manganese.

In the export market, India’s proposed safeguard tariffs on silicon manganese imports have dampened trader sentiment. On the inventory front, data from key warehouses show a two-week decline in social inventories, indicating faster downstream consumption.

Although the substitution of low-carbon silicon manganese in the new energy sector has yet to scale up, ongoing developments in technical pathways warrant close long-term observation.

Outlook: Silico manganese prices may remain firm with short-term fluctuations. Key factors include the impact of summer power supply stability on production in major regions and the speed at which infrastructure investment boosts steel demand.