China: Silico manganese prices remain range-bound on cautious market trends
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Chinese silico manganese prices decreased by RMB 300/t ($41/t) as the market functioned cautiously. Spot prices of silico manganese (60-14) hovered around RMB 8,200-8,400/t ($1,131-1,159/t) ex-works and inclusive of taxes.
Factors driving silico manganese market
Hesitation around production resumption: The dilemma of restarting the production for silico manganese continued to hold place amongst the producers due to their concerns over rising smelting costs and cautious downstream purchases.
However, factory sentiments to support prices have gradually increased due to market supply and demand dynamics, which bolstered the silico manganese market's stability.
Increase in manganese ore costs: The manganese ore market remains strong with high prices. The railway between Gabon's Owendo and Franceville is fully operational, leading to a potential port arrival window and declining inventory. Blocked Australian ore shipments and foreign market support may cause ore prices to rebound.
Rising futures: Downstream demand in the futures market witnessed slight increase, with factories showing a strong willingness to support prices. However, traders exercised caution in their transactions, and closely monitored market adjustments and demand dynamics.
ZCE silico manganese prices decline w-o-w: Silico on China's Zhengzhou Commodity Exchange (ZCE) for September 2024 delivery diminished by RMB 1,076/t ($148/t) to RMB 8,522/t ($1,176/t) on 7 June which was RMB 9,598/t ($1,324/t) on 31 May.
Outlook
The market remains cautious as buyers and sellers wait for clearer trends. The manganese ore market is improving, driven by rising silicon manganese costs, which boosts support for the silicon manganese market. However, downstream acceptance is lacking, and spot market sentiment is shifting. Factory quotations are conservative, but with market recovery, alloy trends are expected to improve.
Note: This article has been written in accordance with an agreement between CBC and BigMint.
