China's silico manganese output retreats in August

Mysteel: Production of silico manganese in China reversed down in August after rising steadily during the previous three months, with the total tonnage lower by 141,005 tonnes (t) or 14.3% m-o-m at 846,975 t, according to Mysteel's latest monthly survey of the 187 Chinese silico manganese smelters it tracks.

The sampled smelters host 99% of China's silico manganese smelting capacity. On a daily basis, their silico manganese output averaged 27,321 t/day in August, falling by 4,548 t/d from the July average, the survey results showed.

Last month, silico manganese output in most major production bases across the country declined by varying degrees, as more Chinese smelters slowed their production pace given their severe losses due to the continuous fall in silico manganese prices. "These days, over 85% of Chinese smelters are losing more than RMB 200/t on their silico manganese sales," a market watcher in Shanghai said.

However, the decrease in production at smelters in northern China was limited, mainly owing to their relatively low smelting costs, while silico manganese output in southwest China's Yunnan increased slightly last month due to the availability of low-priced hydropower during the wet season.

As per Mysteel's assessment, China's silico manganese prices continued to head south in August, with the national price of 6517 silico manganese weakening to RMB 6,038/t ($849/t), including 13% VAT, as of 30 August, sliding by another RMB 436/t from the end of July.

As for the derivative market, the most-traded silico manganese contract on the Zhengzhou Futures Exchange for delivery in January 2025 closed the daytime trading session at RMB 6,412/t on 30 August, some RMB 400/t below the settlement price on 31 July, according to the exchange's data.

Although total silico manganese output declined significantly last month, the supply of the ferro alloy was still in excess due to weak demand from steel producers, who were intent on curbing their finished steel production. This has led the inventories held by Chinese silico manganese smelters to accumulate further, Mysteel Global noted.

Mysteel's bi-weekly survey showed that silico manganese inventories of the 63 Chinese smelters it regularly tracks touched a three-month high of 145,800 t as of 29 August, up another 11,800 t over the last fortnight. These smelters represent about 80% of China's total silico manganese smelting capacity.

China's manganese ore prices also lost ground in August with the weakness of the silico manganese market. According to Mysteel's assessment, as of 30 August, the prices of South Africa-origin 36.5% grade manganese ore at North China's Tianjin Port came in at RMB 33/dmtu, including 13% VAT, lower by RMB 5.5/dmtu from the end of July.

Manganese ore inventories at China's major ports climbed steadily last month, with the total volume reaching 5.52 million tonnes (mnt) by the end of August, higher by 558,000 t or 11.2% m-o-m, according to Mysteel's weekly survey.