Under the backdrop of sluggish transaction and without any positive news, the Silico Manganese market this week has witnessed weak operation. Up to now, manufacturers of main producing areas for silico manganese 65-17 have further adjusted the price lower to be around RMB 7,900-8,100/MT, down RMB 200-300/MT from last week, largely indicating that the time of breaking the mark 8000 comprehensively is not far behind. The alloy index shows that the price of silico manganese 65-17 is down about RMB 50/MT from the previous trading day. Specifically, the price of the same in Henan, Hebei, Shandong, Jiangsu etc. is at RMB 8,185-8,416/MT (delivered, cash including tax).
It is reported that a steel mill in Shandong confirmed purchase price of silicon manganese at RMB 8,040/MT for quantity of 500 tonnes. It was learned in the middle of the week that a further decline from the already low price has greatly stimulated the further weakening of the silico manganese market. Some manufacturers with inventory and capital pressure took the initiative to slash the price in a bid to conclude transactions, only to find little improvement in the purchase willingness due to the business principle of buying in the upward trend.
Futures Market
At the same time, in the futures market, the silico manganese contract 1901 opened flat and moved lower in the morning. The price was suppressed by the average price line throughout the day. Opening at 8,086, the highest at 8,110, the lowest at 7,934, closing at 7,984, and settled at 7,992, down 1.26% (102 points). The number of positions was 61,410 lots, and the trading volume increased slightly compared with the previous trading day. Positions reduced are 6,978 lots.
Manganese Ore
Looking at the raw materials, the manganese ore port market has recently adjusted in line with the Silico Manganese market. The ore price has been under pressure by Manganese Alloy plants and sales were not smooth. Coupled with the weaker support for costs, transaction pressure easily impact negatively on price. The manganese ore stocks at the southern ports are still high, and the Ore traders are in pessimistic, with some facing capital strains are under-selling. However, as the low shipment price at northern ports is close to the cost line, traders are trying to hold the price. On the whole, the manganese ore market may maintain a state of weak stability in the short-term. At present, the mainstream price of Australia lump at Tianjin port is RMB 62-63 /dmtu, semi-carbonated at RMB 54-55 /dmtu, Gabon lump at RMB 60 /dmtu; while at Qinzhou port, the Australia lump is at RMB 62.5-63/dmtu, semi-carbonated at RMB 55-55.5/dmtu, Gabon lump at RMB 60-61/dmtu.
Future Outlook
In general, given the fact that the transactions are not smooth with accumulating stocks, and weakened cost support , the pressure of Silico Manganese production is doubled, especially for plants struggling around the cost line in a market that has no major favorable stimulus. At this stage, some have strong desire to reduce stock while some plan to temporarily cut production or shutdown. It is reported that some manufacturers in Guangxi province suffering loss due to low prices and high costs are currently planning to stop production. As the end of the year approaches, and considering the New Year’s holidays, the industry is paying more attention to the new round of tenders at the end of the month. At that time, the supply and demand situation may change again. However, the market sentiment will still likely be sluggish in a short period of time and a stable price will be the primary goal in the short term for the manufacturers.
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