WEEKLY: China's Silico Manganese Price up Further to 7-Month High

The support of a strong raw material market and positive sentiment led Chinese Silico Manganese prices to continue firming this week to reach a seven-month high, Mysteel Global notes.

As of April 27, the price for 65-17 grade Silico Manganese in North China was assessed at Yuan 7,125/MT (USD 1,005/MT) EXW including the 13% VAT, representing a rise of Yuan 225/MT on week and equaling the high recorded on September 18 2019, according to Mysteel's database.

Driving the Silico Manganese market higher was mainly the strong support the ferroalloy is receiving from high manganese ore prices, Mysteel Global notes. "The offering prices of major manganese ore mines overseas have increased rapidly, boosting optimism in the domestic manganese ore market," a market insider in Shanghai commented.

For example, for the Manganese ore shipments in June-July, United Manganese of Kalahari (UMK), a Manganese ore producer and exporter in South Africa, has lifted its price for 36% Manganese ore by a large USD 2.38/dmtu from that for April to USD 6.98/dmtu CIF China, as reported.

Although the rise in UMK's offering price was larger than the market had expected, some domestic importers have still decided to accept the high offer prices given the limited supply, Mysteel Global notes.

Manganese ore prices at China's major ports have moved up accordingly, with the price index for South Africa-origin 36.5% grade manganese ore at North China's Tianjin port reaching Yuan 54.32/dmtu including the 13% VAT as of April 27 for a Yuan 1.84/dmtu on-week gain, though it retreated slightly from the 17-month high of Yuan 54.82/dmtu on April 23, Mysteel's data showed.

As the high price they are paying for manganese ore has significantly increased their production costs for Silico Manganese, some ferroalloy smelters in North China have reduced their output as they are not willing to purchase manganese ore at such a high price.

Thus, over the April 17-23 period, China's daily Silico Manganese output among the 121 domestic Silico Manganese smelters Mysteel regularly tracks reversed down by 80 MT/day on week to 27,055 MT/day. The 121 smelters under the survey host almost all the country's Silico Manganese capacity.

Sentiment in China's Silico Manganese market has been boosted and some steelmakers have returned to the market early to start tabling their bids for May, Mysteel Global notes.

Releasing its bidding price for Silico Manganese for May procurement recently, Hebei Iron and Steel Group, a leading Silico Manganese buyer in North China's Hebei province, lifted its bid price by a sharp Yuan 900/t on month to Yuan 7,500/MT, Mysteel's survey showed. The mill also lifted its purchasing volume for May by 7,730 MT from that for April to 26,030 MT.

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