Chinese silico manganese prices fell w-o-w to around RMB 5,900/t – 6,100/t ($831/t-$845/t) exw against RMB 6,010/t – 6,110/t exw assessed last week. Despite unchanged cash quotations, the trading atmosphere remains average, characterized by sluggish negotiations and stagnant demand recovery. All prices were ex-works and inclusive of taxes.
Factors driving down prices
Cautious downstream buying, supply constraints: The retail market exhibited minimal price fluctuations, but buyer inquiries fell short of market quotes, indicating a lack of purchasing enthusiasm. Meanwhile, restrictions in Ningxia have triggered production suspensions, contributing to overall market sluggishness. Bidding activity from steel mills in the northern region remains unclear, further dampening sentiment.
Weak demand, looming raw material prices: The Chinese silico manganese market is grappling with weak demand, environmental headwinds, and potential cost pressures from raw materials. The manganese ore market is facing downward pricing pressure, and weakening cost support from silico manganese alloys.
Wait-and-see stance persists in market: Both buyers and sellers have adopted a wait-and-see approach due to prevailing uncertainties. Weak manganese ore and coke prices, coupled with expectations of lower downstream prices in the near term, have created an ambiguous market outlook. Procurement activity remains driven by immediate needs.
ZCE prices remain stable: Silico manganese futures for last week’s deliveries on China’s Zhengzhou Commodity Exchange (ZCE) were also consistent w-o-w at RMB 6,160/t ($844/t) on 8 April, 2024 which could also be the reason for the domestic market price consistency.
The futures market’s poor performance and cautious industry sentiment are reflected in average alloy transaction volumes. However, upcoming steel recruitment plans offer a glimmer of hope for increased demand, leaving suppliers cautiously optimistic.
Outlook
China’s silico manganese market is facing a wait-and-see approach due to weak demand, environmental curbs, and potential raw material cost increases. While suppliers hope for a recovery, short-term stagnation is likely. It will be important to monitor the supply-demand shifts, steel market performance, and low-priced transactions to navigate the near term. Future prospects hinge on downstream steel and manganese ore supply dynamics.