China: Silico Manganese Prices Slips on Oversupply
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Chinese Silico Manganese prices witnessed a fall of RMB 100-200/MT (USD 14.5-29/MT) on W-o-W basis owing to excess supply of the commodity.
An emerging sign of oversupply coupled with moderate demand for the commodity and its volatile future prices have weakened the willingness of producers to quote higher offers.
The current mainstream price of Silico Manganese 65-17 is assessed at RMB 8,500-8,600/MT (USD 1,237.5-1,252/MT).
However, contradicting the same, some of the market participants are of the view that Silico Manganese prices may not witness a sharp fall in short-term considering its promising demand. Additionally, Ningxia will be celebrating its 60th anniversary in later September and might reduce its production to encourage the environment protection campaign.
Moreover, China is also awaiting two festivals which are also expected to raise freight charges as well as the logistical issue. Therefore, some of the steel mills are looking forward to acquiring in advance for October. However, new furnaces will be put into production in October to negate the impact.
The market for Silico Manganese 60-14 remained relatively unchanged under the support lent by Manganese Ore. However, the producers reduced their offers to entice buyers as demand has been diminishing. The Silico Manganese price assessed in major producing areas such as Guangxi and Guizhou are mostly at RMB 6600/MT (USD 961/MT) with deals are heard to have concluded at RMB 6,500-6,600/MT (USD 946-961/MT).
Futures Market
The Silico Manganese contract 1901 in the past week witnessed stability amid narrow fluctuation and the key tone throughout last week was platform consolidation.
This Week's Forecast
During this week, as the Mid-Autumn festival is drawing close, Silico Manganese will enter a new round of tenders, where the market is expected to fall slightly. Moving ahead, it is necessary to pay close attention to the release of new capacity, the production limit and its implementation during the winter season.
