China: Silico Manganese Output to be Severely Impacted In Ningxia on Closure Notices

According to the government document of Pingluo County of Ningxia (notice to close down):

In order to solve the unfavorable situation thoroughly which is commonly seen in excessive energy consuming enterprises due to small furnace type, backward facilities, low comprehensive utilization rate of exhaust gas and heavy environmental pollution in Pingluo County, it is determined by the Pingluo County’s Peoples Government to cut off the power supply county-wide for semi-closed or open type Ferro Alloy submerged arc furnaces (SAF) with capacity no more than 20,000kVA, a measure to ensure the victory over defense war of blue sky. As per the requirement, all relevant enterprises need to cool down their furnace and arrange for the needful before March 10 in preparation for a full stop and from March 20 all relevant furnaces need to be thoroughly shut down. Power supply authority will cut off the power supply for those shutdown plants thus root out the possibility for resumption. Those plants using private power plant should voluntarily dismantle power devices and strictly refrain from resumption.

According to the estimates, this round of action will affect the local monthly production of Silico Manganese in Pingluo, Ningxia, with a total of 27,800 MT/month. According to the monthly output 180,000-240,000MT of Ningxia, the affected amount takes up 11.5% to 15% against peak output. Recently, the performance of silicon-manganese spot and futures has been eye-catching. It is possible that market participants will have optimistic expectations for the short-term supply and demand of Silico Manganese and positive prices in the upcoming period. Nevertheless, attention should not divert from the supply and demand fundamentals and the trend of raw material prices.