WEEKLY: China's Silico Manganese output down amid bear market

Major Silico Manganese smelters in China continued to actively cut Silico Manganese output over the past week amid bearish market sentiment from the shrinking demand and slumping bidding prices from steelmakers, Mysteel Global has learned.

During the February 28-March 5 period, China's daily Silico Manganese output averaged 24,956 MT/day, down another 658MT/day or 2.6% from one week before, according to Mysteel's latest survey among the 121 domestic Silico Manganese smelters it regularly tracks. The smelters under the survey host almost all the country's Silico Manganese capacity.

More Silico Manganese smelters in China have had to bring maintenance stoppages forward or reduce their production last week, an industry observer in Shanghai disclosed. "The bidding price from steel mills in South China was more than Yuan 1,000/MT (USD144/MT) lower from that for February, aggravating the pessimism in domestic Silico Manganese market," he told Mysteel Global.

Steel producers in North and East China have yet to return to the market this month, though their bidding prices for March are expected to be around Yuan 6,000/MT, much lower compared with last month's purchase prices, the market watcher added.

In addition to the sharp falls the bidding prices, bidding volume from steel producers has also shrunk substantially, leading to a further accumulation in Silico Manganese stocks at smelters' yards and encouraging some of them to hold 'Fire Sales' to ease the financial strain, Mysteel Global learned from the market.

Domestic sales for manganese ore remained sluggish over the past week with the reduction in Silico Manganese production and the depressed Silico Manganese market in China. "Although inquiries (for manganese ore) have improved, actual transactions remain very thin as pretend buyers just want to probe the bottom price of this ore," a market source said.

Thus, for the time being Chinese manganese ore suppliers were not willing to cut their offering prices blindly given the sparse sales, Mysteel Global notes. As of March 9, Mysteel's price index of South Africa-origin 36.5% grade Manganese ore at North China's Tianjin port reached Yuan 33.64/dmtu, down slightly compared with last week's Yuan 34/dmtu, while the price for 6517 grade Silico Manganesein North China remained stable at Yuan 5,950/t EXW including the 13% VAT, the same level from one week earlier, according to Mysteel's data.

(This article has been published under the article exchange agreement between SteelMint Research and Mysteel Global.)