Steel Tender Outlook Clarifies, and Silicomanganese Prices Rose Sightly

Fundamental Analysis

Supply Side: Last week, select furnaces in Inner Mongolia that had previously undergone maintenance resumed production, while operations at other vegetation remained largely unchanged; some vegetation indicated possible plans to restart if market conditions enhance. Operating rates to silicomanganese in Ningxia have essentially bottomed out at around 30%, with no clear signs of further production cuts; high-cost inventories in production regions remain difficult to move.

Overall operating rates in the southern region have remained relatively stable; while market prices hit recent highs last week, producers in Guangxi and Guizhou face costs exceeding 5,800 yuan due to high electricity and ore prices, leaving little room to profitable sales. Meanwhile, alloy production in Yunnan is largely to captive consumption, representing a small share of the overall market.

Statistics show that the operating rate of silicomanganese companies nationwide stood at 31.3% last week, up 3.13% from the week prior; average daily output rose by 480 tonnes to 22,920 tonnes.

Incomplete data indicates that as of August 14, national inventories held by silicomanganese companies totaled 458,000 tonnes, a decrease of 5,000 tonnes. By region, inventories declined to varying degrees in Inner Mongolia, Ningxia, Guangxi, Guizhou, and the Shanxi-Gansu-Shaanxi area—with Ningxia recording the largest drop (to 334,000 tonnes)—while inventories in Sichuan, Yunnan, and Chongqing rose by 4,000 tonnes to 61,000 tonnes. Overall, the data points to a slight destocking direction among manufacturers, with inventory levels falling across most major production regions, with the exception of the Southwest.

Upstream costs: Last week, spot market sentiment to manganese ore improved, with a reduced willingness to sell at low prices; overall ore prices stabilized, and some traders temporarily withheld price quotes. Quotes at Tianjin Port were approximately 33 RMB/dmtu to semi-carbonate ore and 28.5 RMB/dmtu to South African high-iron ore; Gabonese ore was quoted at around 38 RMB/dmtu; South32 Australian lump ore ranged from 37.8 to 38 RMB/dmtu; and CML Australian lump ore was quoted at around 40 RMB/dmtu.

Manganese ore prices at Qinzhou Port show mixed trends; Australian lump ore prices remain firm at around 38 RMB/dmtu due to high costs and concentrated ownership, whereas demand to other ore varieties is sluggish, leading to slight price softening. High-iron and medium-iron ores are moving slowly, with prices under downward pressure due to limited demand; South African high-iron ore is priced at 30.5-31 RMB/dmtu, South African medium-iron ore at around 35.5 RMB/dmtu, and semi-carbonate ore at approximately 35.5 RMB/dmtu.

Regarding overseas market pricing, UMK announced its manganese ore quotes to China to September 2026, pricing South African semi-carbonate manganese ore at $4.10 per dmtu—a decrease of $0.40 per dmtu from August. Jupiter also announced its September 2026 quotes to China, pricing South African semi-carbonate lump ore at $4.10 per dmtu, down $0.50 per dmtu from its August offer. Meanwhile, NMT released its September 2026 quotes to China, pricing South African semi-carbonate manganese ore at $4.10 per dmtu, a month-on-month decline of $0.50 per dmtu.

On the demand side, rebar production has contracted and profit margins have declined; while the overall impact on silico-manganese consumption is limited, this has dampened price negotiations to steel mill tenders, resulting in a month-on-month price drop to the new round of tenders in East China.

HBIS Group set its silico-manganese purchase price at 5,880 RMB/ton to August 2026, with an initial inquiry price of 5,800 RMB/ton. The price to July was 5,950 RMB/ton (compared to 6,200 RMB/ton in August 2025). The procurement volume is 16,600 tonnes, versus 15,400 tonnes in July (and 16,100 tonnes in August 2025).

Market Outlook

Overall, the silicomanganese market sees a clearer picture regarding steel mill tenders; there is downward pressure on low-priced procurement, and cost support has marginally strengthened. Furnaces in production regions that previously halted operations remain offline, while demand is gradually being released. Furthermore, as the month passes its midpoint, the market might begin to price in consumption expectations to the "Golden September" peak season. SunSirs anticipates that the silicomanganese market will likely continue to experience minor fluctuations in the short term.