China's silico manganese output rises further in August

Total silicomanganese output among the 121 Chinese smelters under Mysteel's tracking increased for the fourth consecutive month in August, with the tonnage up by another 25,254 tonnes or 2.5% on month at 1.02 million tonnes, a new high since December 2013. The sampled smelters host 94% of China's SiMn smelting capacity.

On a daily basis, SiMn output among the surveyed smelters averaged 32,890 tonnes/day last month, jumping by 814 t/d from the average for the prior month, according to Mysteel's latest monthly survey.

The continuous on-month rise in SiMn production occurred because domestic smelters in northern China kept their production high given their healthy profit margins, Mysteel Global noted. At the same time, many smelters in southern China also resumed operations last month after completing maintenance on their smelting facilities.

SiMn output in most major production bases increased by varying degrees last month, despite the on-month decrease of 7.3% in North China's Inner Mongolia as more local smelters there initiated maintenance, the survey showed.

China's SiMn prices recovered further in August thanks to the positive sentiment in the domestic market with the steady demand from steel producers and their increased bidding prices for the ferroalloy.

As of August 31, the national price of 6517 SiMn was assessed by Mysteel at Yuan 6,613/tonne ($906/t) including the 13% VAT, higher by Yuan 110/t compared with the end of July.

For delivery in August, the bidding price tabled by Hebei Iron and Steel Group, a major steel producer in North China's Hebei province, was reported at Yuan 6,900/t, up Yuan 200/t from the prior month, and its bidding volume also increased by 3,200 tonnes on month to 23,300 tonnes, according to Mysteel's survey.

As for the futures market, the most-traded SiMn contract on the Zhengzhou Futures Exchange for November delivery closed the daytime trading session at Yuan 6,922/t on August 31, higher by Yuan 164/t from the settlement price recorded one month earlier, according to the exchange's data.

Domestic SiMn smelters' production costs did not undergo any significant rise last month, given the relatively stable prices of manganese ore, which also encouraged the smelters to keep their production high, Mysteel Global noted.

China's manganese ore prices kept rangebound in August, with the price of South Africa-origin 36.5% grade Mn ore at North China's Tianjin port reaching Yuan 30.8/dmtu including the 13% VAT as of August 31, unchanged from one month before, or down Yuan 0.4/dmtu from the recent high on August 16, according to Mysteel's assessment.

Note: This article has been written in accordance with an article exchange agreement between Mysteel Global and SteelMint.