- Elevated power tariffs, Mn ore costs squeeze margins
- Signs of recovery emerge despite weak demand overall
CBC: Chinese silico manganese (Mn:65%, Si:17%) prices edged down by RMB 30/tonne (t) ($4/t) w-o-w to RMB 5,670-5,940/t ($795-$833/t) exw, including taxes.
Silico manganese prices remained under pressure amid weak demand, indicated by rising port inventories. However, high ore and power costs supported prices and limited the downtrend. Demand from the traditional steel sector remained weak, though selective restocking by certain mills signalled a partial demand rebound.
Market recap
Demand stays weak, but signs of rebound emerge: The traditional steel sector, pressured by the real estate downturn, kept procurement weak, with mills maintaining low inventories and reducing raw material prices. Growing port inventories also softened traders’ willingness to quote higher offers.
However, signs of recovery emerged, with some need-based buying seen. Additionally, HBIS Group’s silico manganese procurement rose by 1,500 t m-o-m to 16,100 t in August. A Guangxi-based steel mill also bid for 9,500 t at RMB 5,900/t, indicating a partial rebound in demand.
Production costs face upward pressure: Silico manganese production costs continued to rise, pressuring smelter margins, as raw material prices remained firm. Manganese ore was still expensive, with South African semi-carbonate at about RMB 34/t, Gabonese ore at RMB 39.5/t, and Australian lumps at RMB 40.5 – 42/t at Tianjin Port.
Electricity costs, which account for a large share of production expenses, remained elevated, adding further upward pressure. Power prices in Yunnan were notably higher than the national average, further squeezing producer margins.
Outlook
Silico manganese prices are likely to stay volatile in the short term, with high ore and power costs pressuring margins, though selective steel mill demand may offer limited support.
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