China: Silico manganese prices dip amid cautious sentiments despite high ore costs

The silico manganese market in China remained dull w-o-w, with prices (Mn: 65%; Si: 17%) moving down by RMB 300/t ($41/t) to RMB 7,040- 7,340/t ($969-$1,010/t).

Factors driving the market

Strong raw material prices: The manganese ore market remained strong with high prices which provided cost support to silicon manganese alloys. The railway track between the Gabonese ports of Owendo and Franceville has been repaired and fully restored to operation. This will allow a window period for arrivals at the port, with port inventory expected to decline. Additionally, shipments of Australian ore are currently blocked, lending support to foreign markets and potentially causing ore prices to rebound.

Cautious downstream demand: In terms of downstream demand, the futures market showed a downtrend. Factories were strongly inclined to support prices due to the high cost of production, while industry insiders adopt a cautious stance.

In the short term, it is crucial to monitor the development of low-price transactions and changes in the supply-demand dynamics of silico manganese.

ZCE silico manganese prices decrease w-o-w: Silico manganese prices on China's Zhengzhou Commodity Exchange (ZCE) for September 2024 delivery declined by RMB 336/t ($46/t) to RMB 7,254/t ($999/t) on 12 July against RMB 7,590/t ($1,045/t) on 5 July.

Outlook

Overall, the market is in a wait-and-see mode, with both buyers and sellers cautiously observing the trends and downstream price acceptance levels need to improve. As the market recovers, it is expected that the trend of silico manganese alloys will continue to improve.

Note: This article has been written in accordance with an agreement between CBC and BigMint.