China: Silico manganese market exhibits stagnation amidst downturn signals
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Stagnancy in silico manganese prices reflected consistent market conditions amidst lingering sluggishness in China last week. Prices were firm to around RMB 5,900/t - 6,100/t ($815/t-$843/t). All prices were ex-works and inclusive of taxes.
The factors that drove the price stability in China were:
Negotiations and market demand remain subdued: Recent negotiations in the silico manganese market revealed a persistence of weak sentiment. This lack of robust buying activity is compounded by tepid overall market demand. Furthermore, the situation is further challenged by a rise in production stoppages within the Ningxia region due to environmental regulations. This confluence of factors has led to a prevailing sluggishness across the market.
Mn ore price recovery buoys silico manganese market: The recent uptick in manganese ore prices is injecting a dose of optimism into the silico manganese market. This cost-side support for silico manganese production could lead to more stable pricing in the near term.
With these developments, coupled with external market support, there's a possibility that ore prices may rebound. This scenario could further bolster the silicon manganese market and contribute to its anticipated recovery.
Downstream uncertainty and cautious sentiment: Subdued performance in the futures market, a key indicator of downstream demand for silico manganese, has fostered cautious operating sentiment among industry participants. This translates into average alloy transaction volumes in the current period. However, a glimmer of optimism exists, as some industry players anticipate a potential rise in demand later in the year when steel production is expected to pick up.
ZCE prices remain range bound: Silico manganese futures for last week's deliveries on China's Zhengzhou Commodity Exchange (ZCE) were also consistent with a slight increase by RMB 200/t ($28/t) w-o-w at RMB 6,374/t ($881/t) on 15 April, 2024 which could also be the reason for the domestic market price consistency.
Outlook
Given these prevailing conditions, the silico manganese prices is likely to remain firm in near-term. However, continuous monitoring of key metrics, including downstream steel production trends, cost structures, and evolving demand dynamics, will be crucial for accurately assessing the future price trajectory.
Note: This article has been written in accordance with an agreement between CBC and BigMint.
