Chinese silico manganese prices drop $28/t w-o-w amid cautious buying

Silico manganese prices in China dropped by RMB 200/t ($28/t) this week owing to a cautious market environment. Prices were at around RMB 6,110/t to 6,210/t ($849/t-$863/t). All prices were ex-works and inclusive of taxes.

Why the market curtail?

Market slow after holidays: China's silico manganese market was dull, and the trading atmosphere was relatively average. As manufacturers gradually resumed work post-holidays, the market lacked clear guidance.

Constant supplies: Downstream enquiries and purchases have not yet entered the status quo. There were retail transactions in the northern region. There has been no significant change in the supply side of silico manganese. The north maintains stable supply, while the resumption of production in the south remained difficult.

Futures recede: The current performance of the futures market indicates a poor outlook, with cautious sentiment among industry players and average alloy transactions.

Factors that may drive prices:

Manganese ore market: The sentiments in the manganese ore market suggest a growing price support, with acceptable market performance. The restoration of the railway track between Gabon ports of Ovindo and Franceville is complete, allowing for improved transportation. As Gabon experiences a window period for arrivals and port inventory decreases, coupled with external market support, there is potential for ore prices to rebound.

Steel market to bounce back: As steel recruitment progresses, there are positive expectations for increased demand from industry players, and suppliers are optimistic about the market outlook. In the short term, it is important to monitor low-price transactions in the market and changes in the supply and demand dynamics of silico manganese.

Outlook

The current market sentiment is characterised by a cautious wait-and-see approach, with both buyers and sellers adopting a similar stance. The overall cost support for silico manganese alloys remains stable, and as the market gradually recovers, there is potential for positive trends in the alloy sector.

However, the silico manganese market is anticipated to remain stagnant in the short term.

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