China: Silico manganese prices remain largely stable amid perpetually weak demand

• Prices slip below production costs
• Bearish futures weigh on market sentiment

Chinese silico manganese prices (Mn 65%, Si 17%) were largely stable, witnessing a slight drop of RMB 20/t ($3/t) w-o-w to RMB 5,600-5,900/t ($824-868/t) exw, meanwhile silico manganese (Mn 60%, Si 14%) prices declined by RMB 10/t ($1/t) w-o-w to RMB 5,440-5,560/t ($800-818/t) in the week ended 29 June 2026.

The silico manganese market remained weak, with prices falling below production costs amid weak steel demand and elevated inventories. Rising coking coal prices squeezed producer margins, while seasonal production resumptions partly offset maintenance-related supply cuts. Bearish futures sentiment continued to weigh on prices despite low operating rates.

Market updates

Coking coal prices tighten producer margins: Rising coking coal prices remained the key cost driver, with eight consecutive price hikes significantly increasing silico manganese production costs. Despite mounting cost pressure, weak steel demand and falling futures prices prevented producers from passing on higher costs, pushing most smelters into loss-making territory. The widening gap between production costs and market prices has strengthened producers’ resistance to further price cuts, although subdued buying activity continues to limit pricing power.

Seasonal slowdown curbs demand: Steel demand remained subdued, with mills maintaining need-based procurement amid the seasonal slowdown in construction activity. July tenders showed only marginal improvement, while several eastern China mills continued to negotiate lower cash prices. Weak finished steel demand, coupled with high temperatures and heavy rainfall, discouraged bulk restocking, while bearish futures sentiment further dampened spot market activity.

Outlook

Silico manganese prices are expected to remain weak in the near term as subdued steel demand, elevated inventories, and bearish futures continue to outweigh cost support from higher coking coal prices. While production cuts may provide limited support, a sustained recovery will depend on stronger July steel tenders and further supply rationalization.

(With inputs from CBC)