Chinese silico manganese prices surge by $69/t w-o-w on rising raw material costs

China's silico manganese prices went up w-o-w by RMB 500/tonne ($69/t) this week as production costs surged due to elevated raw material prices.

Spot prices of silico manganese (60-14) increased by RMB 500/t ($69/t) to hover at a range of RMB 7,950/t-8,150/t ($1,121-1,149/t) ex-works and inclusive of taxes.

Factors driving market movement were:

High raw material prices: Manganese ore prices remained robust, leading to significantly increased smelting costs for silico manganese enterprises. As a result, manufacturers were strongly inclined to support prices.

However, the recent decline in silico manganese futures prices, combined with the cautious pricing stance of downstream steel mills, have shifted market sentiment.

Although, there has been an increase in inquiries, actual purchases remained cautious. The market continues to face an upward pressure and is hopeful for positive developments in the near future.

Gabon railway reopens: The railway track between the Gabon ports of Ovindo and Franceville has been repaired and fully restored to operation. Despite this, there will be a window period for arrivals in Gabon, leading to a continued decline in port inventory.

Moreover, if Australian ore shipments face disruptions and are further supported by the external market, ore prices may experience a rebound.

Decline in futures market: The recent decline in the futures market has made steel mills hesitant to set prices, leading to cautious operations among industry players.

Despite this, there is optimism about increased demand following market adjustments, and suppliers remain hopeful about the market outlook.

ZCE silico manganese prices decline: China's Zhengzhou Commodity Exchange (ZCE) for September 2024 have decreased by RMB 468/t ($66/t) to RMB 8,318/t ($1,173/t) on 17 May which was RMB 8,786/t ($1,239/t) on 10 May.

Outlook

Taken together, the market is characterised by a strong wait-and-see attitude among both buyers and sellers, who remain cautious.

In the short term, it is important to monitor the development of low-price transactions in the market and changes in the supply and demand dynamics of silicon manganese.

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