- Higher manganese ore, slag costs support prices
- Export demand wanes after peak season boost
CBC: Chinese silico manganese prices (Mn 65%, Si 17%) inched down by RMB 100/t ($14/t) w-o-w to RMB 5,460-5,730/t ($768- 806/t) exw, inclusive of taxes.
Silico manganese prices inched down over the week, weighed by weak steel demand and slowing export activity, despite strong support from firm manganese ore and slag prices. High raw material costs kept production expenses elevated, but limited downstream acceptance and cautious buying continued to restrict any upward movement.
Market recap
Strong ore, slag prices squeeze margins: Raw material costs supported silico manganese prices, with strong manganese ore prices pushing up production costs. Elevated input costs also meant producers had to operate on tight margins, which prevented them from reducing prices too much.
High-manganese slag prices also remained firm, supported by low inventories at northern plants, which were focused on fulfilling long-term orders. This further squeezed downstream margins. Additionally, expectations of production cuts in related alloy products reinforced overall cost support.
The raw material market also showed structural divergence, with high-quality ores maintaining firm support while lower-grade ores remained under significant pressure.
Producers face pressure amid weak demand: The rise in raw material prices could not be passed on to end-users, as downstream demand remained weak. Manufacturers continued to struggle to balance higher costs with weak demand, making their price support more passive than intentional.
Stainless steel consumption remained weak, with buyers restocking on a need basis, providing little support to silico manganese prices. In contrast, demand from the special steel sector strengthened, offering a short-term boost, though its overall impact remained limited.
Inconsistent trader pricing also capped upward price movement. Furthermore, steel mill bidding negotiations have become a key factor shaping short-term trends, consistently exerting downward pressure on prices.
Export demand slows after restocking: Export demand had strengthened earlier in the peak season (end of July to the first week of September), lifting FOB prices, but activity has slowed once restocking ended.
Outlook
Silico manganese prices are likely to remain range-bound in the near term, supported by firm raw material costs, though weak downstream demand will likely continue to cap any upward movement.
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