WEEKLY: High smelting costs support China's silico-manganese price

China's silico-manganese prices remained stable over the past week, with the market kept firm thanks to the support of high production costs, Mysteel Global learned. Prices remained supported, even though the domestic market was still quiet as the new round of buying among steelmakers had yet to begin.

As of June 22, the price of the 65-17 grade Silico-manganese in North China was assessed at Yuan 6,600/t ($932/t) EXW including the 13% VAT, unchanged from one week earlier, according to Mysteel's database.

"The high-priced manganese ore they'd purchased earlier increased the production costs of domestic Silico-manganese smelters, lending some support to Silico-manganese prices," a market watcher in Shanghai said, adding that most smelters were reluctant to accept low buying prices in the market given their high smelting costs.

Transactions involving this ferroalloy in China's spot market remained subdued as most steel mills had yet to return to the market to start bidding for July purchases, and traders also preferred to wait and see after noting uncertainties in mills' bidding prices recently.

"Demand for Silico-manganese from steel producers is expected to keep firm in the near term while the mills are keeping their steel production high," the Shanghai-based market source said. "But on the other hand, Silico-manganese supply also remains sufficient which may encourage them (Chinese steelmakers) to lower their buying prices."

Over June 12-18, China's daily Silico-manganese output registered 26,225 t/day, still at a relatively high level though the average was 140 t/day lower from the previous week, according to Mysteel's survey among China's 121 Silico-manganese smelters which together host almost all the country's Silico-manganese capacity.

Meanwhile, prices of manganese ore in China resumed trending downward again from the second half of last week given the jump in arrivals of this ore at major ports, indicating that shipments from overseas exporters have been recovering despite the on-going battle against COVID-19 in South Africa and Brazil.

As of June 22, the price of South Africa-origin 36.5% grade manganese ore at North China's Tianjin port was at Yuan 40.04/dmtu including the 13% VAT, down Yuan 2.04/dmtu on week, according to Mysteel's data. Manganese stocks at the country's six main ports reversed up after their steady decline over the prior three weeks, rising by 26,000 tonnes from last week's 8.5-month low to reach 3.96 million tonnes as of June 19.

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