Amidst Excess Inventory and Oversupply, Silicomanganese Prices Were Experiencing a Gradual Decline

According to SunSirs data: Last week, the silicomanganese market remained in a state of weak fluctuation. Nationwide inventories of silicomanganese were substantial, and the market faced a significant supply surplus. On the cost side, the consumption of manganese ore was sluggish, and port inventories remained high; consequently, lacking any significant market support, spot prices to silicomanganese experienced a gradual decline. Data from the SunSirs Commodity Market Analysis System indicates that as of the end of last week, market quotes to silicomanganese (spec: FeMn68Si18) in the Ningxia region ranged from approximately 5,660 to 5,750 RMB/ton. The average market price stood at 5,710.00 RMB/ton, representing a 0.52% decrease compared to the beginning of the week.

Fundamental Analysis

Supply Side: Last week, newly added capacity at a few individual vegetation in Inner Mongolia had not yet commenced iron production; additionally, there is an expectation that another plant might initiate furnace ignition next month. Meanwhile, substation maintenance in certain specific regions resulted in a minor impact on plant output. In Ningxia, overall production operations remained relatively stable; manufacturers maintained a consistent pace of mining activities, and on-site inventory levels remained steady, suggesting minimal expectation to immediate fluctuations in production volume.

In the southern production regions—specifically Guangxi and Guizhou—electricity rates currently remain unchanged, yet there is an expectation of future increases; consequently, production output is unlikely to recover. In Yunnan, however, the region is about to enter its seasonal period of reduced electricity rates in June, prompting factories to gradually prepare to a resumption of production. Moving forward, any incremental development in output from the southern regions is expected to be concentrated primarily in Yunnan. On the steel mill side, pricing to might procurement tenders has already been established; most southern steel mills have set their rates in the vicinity of 5,950 RMB/ton, leaving manufacturers with virtually no room to profit.

According to statistics, the operating rate of manganese-silicon companies nationwide stood at 31.49% last week—an increase of 0.96 percentage points from the previous week. The average daily output reached 25,687 tons, an increase of 850 tons.

Based on incomplete statistics, as of might 22, the total inventory held by manganese-silicon companies nationwide amounted to 362,500 tons, representing a month-on-month decrease of 8,500 tons. Regional breakdowns are as follows: Inner Mongolia held 51,000 tons (down 3,000 tons month-on-month); Ningxia held 294,500 tons (down 6,000 tons); Guangxi held 2,000 tons (unchanged); Guizhou held 2,000 tons (up 1,000 tons); the Shanxi/Gansu/Shaanxi region held 4,000 tons (down 500 tons); and the Sichuan/Yunnan/Chongqing region held 9,000 tons (unchanged).

Upstream Costs: In recent days, sentiment within the manganese ore market at ports has shifted toward a reluctance to sell at low prices. Meanwhile, downstream buyers—even after the outlook to steel procurement tenders has have become somewhat clearer—remain unenthusiastic about purchasing manganese ore and continue to exert downward pressure on prices. With port inventories of manganese ore declining only slowly while high-priced shipments continue to arrive, the tug-of-war between buyers and sellers in the immediate market has intensified. In the spot market at ports, traders maintain a relatively stable mindset, focusing primarily on moving inventory at steady prices and refraining—to the time being—from actively adjusting their quotes. Regarding overseas markets, the June offer to UMK semi-carbonate ore shipped to China stands at $4.75 per dmtu, though market acceptance of this price remains moderate.

As of might 22, manganese ore prices at Tianjin Port were quoted as follows: Australian lump ore at 41.5–44.5 RMB/MTU, semi-carbonate ore at 38.5 RMB/MTU, and Gabonese lump ore at 42–42.5 RMB/MTU. At Qinzhou Port, prices were quoted at 41.5–43.5 RMB/MTU to Australian lump ore, 37.5 RMB/MTU to semi-carbonate ore, and 42–42.5 RMB/MTU to Gabonese lump ore.

Regarding demand: HBIS Group has finalized its might tender price to silicomanganese at 6,050 RMB/ton (tax-inclusive, payable via bank acceptance draft). This represents a decrease of 250 RMB/ton compared to the previous round, while the procurement volume of 8,500 tons remains unchanged. Recently, tender prices to silicomanganese at several other steel mills have largely settled in the range of 5,950–6,000 RMB/ton. A steel mill in Yunnan Province set its silicomanganese price at 5,990 RMB/ton, with a tender volume of 1,000 tons (tax-inclusive, cash payment, delivered to plant). A steel mill in East China set its price at 5,965 RMB/ton to a volume of 7,000 tons (tax-inclusive, payable via bank acceptance draft, delivered to plant, with a base-price adjustment clause). Another steel mill in East China set its price at 6,000 RMB/ton to a volume of 1,000 tons (tax-inclusive, payable via bank acceptance draft, delivered to plant).

Market Outlook

Overall, the current silicomanganese market is characterized by narrow-range consolidation. On one hand, a strengthened willingness among producers to hold firm on pricing—driven by rising costs—has limited the possible to further sharp declines in silicomanganese prices; on the other hand, a lackluster demand ecological stability and prevailing bearish market sentiment are suppressing any possible rebound. With major manufacturers' tenders now finalized and the current round of steel procurement drawing to a close, market prices are experiencing minor fluctuations, while downstream inquiry activity remains subdued. The silicomanganese market continues to witness a tug-of-war between producers seeking to support prices and downstream buyers pushing to reduce rates; lacking any decisive catalyst to break this stalemate, SunSirs forecasts that the market will likely continue to fluctuate at low levels in the short term.