China's silico manganese market witnesses temporary uptrend

The silico manganese market in China exhibited a period of cautious optimism last week, marked by price stability and positive market sentiment. Spot prices remained firm, hovering within a range of RMB 5,900/t - 6,100/t ($814/t-$842/t), all ex-works and inclusive of taxes.

Key drivers and considerations:

Production resumption and supply balancing: The market displayed stability following a recent downturn, suggesting a more promising outlook. While a potential increase in supply is anticipated due to production resumptions in Ningxia, this could be mitigated by temporary output reductions caused by maintenance shutdowns in Inner Mongolia. Notably, improved enthusiasm from steel mills to ramp up operations indicates growing demand for silico manganese, potentially leading to further market improvement.

Manganese ore market tailwinds: The uptrend in the manganese ore market served as a positive factor for the silico manganese industry. Rising ore prices provided support at the cost-end of silico manganese production, mitigating potential upward pressure on selling prices.

Improved supply chain efficiency: The repair and restoration of the railway track in Gabon is a significant development with the potential to facilitate smoother transportation of manganese ore. This could alleviate logistical bottlenecks and ensure a more efficient supply chain for the silico manganese industry.

Additionally, the upcoming arrival window in Gabon, coupled with declining port inventory and external market support, suggests the possibility of a rebound in ore prices. This, in turn, could have favorable implications for the silico manganese market by stabilizing input costs.

Downstream demand optimism: The market remains optimistic regarding increased demand for silico manganese due to continued growth in steel production. Suppliers also expressed confidence in the market's future prospects, further bolstering positive sentiment within the industry.

Near-term outlook

The near-term outlook for China's silico manganese market is cautiously optimistic. While potential upward pressure exists on the supply side due to production resumptions, this could be balanced by growing demand from steel mills.

Meanwhile, on April 22, positive factors propelled silico manganese market upward by 3.19%, reaching five-month highs. Inner-Mongolia's Wulanchabu Alloy Association proposed a 10% output reduction to stabilize prices, boosting silico manganese futures.

Additionally, the recent upward trend in the manganese ore market is expected to provide support for stable input costs within the silico manganese industry. Close monitoring of production levels, steel production trends, and developments in the manganese ore market will be crucial for accurately assessing the market's long-term trajectory and informing strategic business decisions.

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