China: Silico manganese prices edge higher amid tight supply, cost support

• Production in north China limited amid environmental controls
• Steel demand stays weak, restocking activity offers some support

CBC: Silico manganese (Mn: 65%; Si: 17%) prices in China rose slightly, ranging between RMB 5,580-5,850/t ($784-822/t), with an average price of RMB 5,715/t ($803/t). Tight supply and higher raw material tags contributed to the price hikes.

Market overview

The silico manganese market recorded a mild uptick. On the supply side, production in northern China remained restricted due to environmental controls, curbing the output of high-energy furnaces and limiting overall market growth.

On the consumption side, traditional steel demand weakened, but rising requirements from high-end steel producers offered some support. Construction steel transactions stayed sluggish, and with narrow steel mill margins, alloy procurement remained cautious.

High raw material costs continued to squeeze profits, prompting producers to maintain firm offers. International manganese ore prices and rising manganese sulphate costs provided support, while traders maintained a cautious and price-sensitive stance, resulting in tough negotiations between buyers and sellers.

Raw material scenario

The raw material segment showed signs of tightness. South African port strikes delayed manganese ore shipments, slightly pushing up semi-carbonated ore prices at Tianjin Port. However, high port inventories capped further gains. Environmental restrictions also led to higher coking coal and chemical coke prices, strengthening the cost base for silico manganese.

Downstream market sentiments

Downstream buyers mainly focused on cautious procurement, though some restocking emerged due to low inventories, causing a slight m-o-m rise in tender prices. Construction steel demand remained subdued amid real estate weakness, while stainless steel demand offered marginal support. Trading activity was dominated by long-term contracts, and spot liquidity stayed weak as traders adopted a wait-and-watch approach. Continued crude steel production limits may further dampen potential alloy demand.

Outlook

In the short term, silico manganese prices are likely to remain range-bound, supported by firm ore and coal costs. However, rising Yunnan output and weaker steel demand could exert downward pressure medium term.