China: Silico manganese market to continue facing challenges in CY'25

• Domestic SiMn output expected to rise, demand to thin
  
  
• Ample Mn ore supply to prevent cost support for SiMn
  
  

Mysteel: China's silico manganese (SiMn) market is expected to face more challenges this year, with output among domestic smelters expected to rise and demand from steel producers expected to thin, according to Mysteel's latest forecast for the ferro alloy.

Production may increase this year, as new capacity is scheduled for commissioning, especially in North China's Inner Mongolia, where local manufacturers can enjoy competitive smelting costs from lower electricity rates.

In CY'25, China's total SiMn capacity is expected to reach 23.2 million tonnes (mnt)/year (y), representing an increase of 1.38 mnt/y or 6.3% from last year. Total SiMn output may touch 10.8 mnt this year, as against 10.15 mnt in 2024, which makes for a slight y-o-y increase, Mysteel's survey among the 187 Chinese smelters under its regular tracking showed. The sampled smelters host 99% of China's SiMn smelting capacity.

However, to some extent, the commissioning of newly added SiMn capacity may be constrained by demand for and prices of this ferro alloy. It is expected that many smelters may delay their commissioning plans for this year if SiMn demand and prices fall short of expectations.

Consumption of SiMn in China last year decreased by 2% y-o-y to 9.34 mnt. This year, given the likelihood of lower crude steel output among domestic steelmakers due to gradually softening steel demand from end-users, the decline in SiMn demand may continue and drag the total to 9.25 mnt, lower by another 1% from last year.

The report showed that China's crude steel output in 2025 may touch 990 mnt, falling by 20 mnt or 1.9% y-o-y.

Besides, China's SiMn market seems unlikely to gain too much support from the cost side.

Although manganese ore demand from Chinese SiMn producers remains stable overall, thanks to the smelters' high run rates, the volume of ore delivered to China's major ports may increase if South32, the world's top manganese ore miner, completes repairs to its typhoon-damaged Groote Eylandt Port and resumes shipments of Australian manganese ore during this year's second quarter as planned. Should this happen, it may put some pressure on manganese ore prices.

Shipments of manganese ore from South32's Australia Manganese joint venture were suspended after the Northern Territory port suffered heavy damage from Tropical Cyclone Megan in mid-March 2024.

Manganese ore shipped from Australia to China last year totalled 3.06 mnt, lower by a huge 59% from the previous year, with South 32's Groote Eylandt troubles chiefly to blame.

China's prices of SiMn and manganese ore both lost ground overall in the second half of 2024 after the surge in the second quarter, mainly due to the imbalance between supply and demand and the weakness of SiMn futures prices.

By the end of 2024, the national price of 6517 SiMn under Mysteel's assessment was at RMB 5,903/tonne (t) ($805/t), including the 13% VAT, slumping by RMB 1,400/t from the end of June, or down by RMB 347/t y-o-y.

In parallel, prices of South Africa-origin 36.5% grade manganese ore at North China's Tianjin Port fell by RMB 14/dmtu from the end of June to RMB 33.5/dry metric tonne unit (dmtu), including 13% VAT as of 31 December, though prices were RMB 3/dmtu higher y-o-y.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.