China's Silico manganese output stays high, sentiment improves

Chinese silicomanganese (SiMn) output remained relatively high during the week of July 14-20, with daily production among the 121 domestic smelters under Mysteel's regular survey averaging 31,856 tonnes/day, edging down by just 63 t/d on week. The 121 sampled smelters host 94% of the country's SiMn smelting capacity.
The on-week decrease was limited as smelters in northern China could still gain some profits on sales and so kept their run-rates up. Meanwhile, SiMn demand from steel mills remained stable, which gave Chinese smelters some confidence to maintain high production, Mysteel Global noted.

Sentiment in the domestic SiMn market improved somewhat over the past week, mainly supported by the ferroalloy's better performance in the futures market and the higher procurement prices that some steel producers in East China were paying.

As of July 21, the most-traded SiMn contract on the Zhengzhou Futures Exchange for October delivery closed the daytime trading session at Yuan 6,702/tonne ($932/t), higher by Yuan 48/t from the settlement price recorded one week earlier, according to the exchange's data.

Domestic SiMn prices in the physical market also recovered slightly in the second half of last week, with the national price of 6517 SiMn under Mysteel's assessment reaching Yuan 6,449/t including the 13% VAT as of July 21. This was lower by Yuan 8/t from one week before, but still Yuan 7/t higher compared with last Tuesday.

SiMn inventories held by the 63 domestic smelters under Mysteel's bi-weekly survey declined steadily last week to reach 221,250 tonnes as of July 20, lower by another 29,200 tonnes on fortnight and touching the lowest since mid-March. These smelters host about 80% of domestic SiMn smelting capacity.

Meanwhile, China's manganese ore prices kept stable over the past week, as domestic traders refused to lower their offering prices after noting signs of a recovery in SiMn prices and the steady consumption of manganese alloy smelters, Mysteel Global learned.

As of July 21, the price of South Africa-origin 36.5% grade Mn ore at North China's Tianjin port was still at Yuan 30.8/dmtu including the 13% VAT, the same level from one week before, according to Mysteel's assessment.

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