EMM Market Shows Strong Cost Support, Month-End Factors Drive Price Loosening

Recently, China's EMM market displayed a distinct dual pattern of "strong cost support with loosening at highs," with intensifying industry supply-demand and cost dynamics.
On one hand, the tight balance in supply and demand for the core raw material manganese ore persisted, compounded by high prices of other auxiliary materials, jointly pushing up EMM smelting costs and providing solid floor support for manganese prices.
On the other hand, traditional month-end demand weakness and tightening liquidity, coupled with linked downward movements in associated products along the industry chain, led to a rational pullback in EMM prices that had been consolidating at highs, with market sentiment gradually shifting from firm stability to cautious wait-and-see.

Raw material side, the manganese ore market's sustained upward momentum became increasingly prominent, serving as the core driver of rising EMM costs. Recently, major ex-China manganese ore suppliers successively raised their export offer prices to China, directly causing a significant increase in landed costs of imported manganese ore in China, which in turn drove domestic manganese miners to follow suit with higher quotes. The overall China manganese ore market exhibited a "rising tide lifts all boats" trend. Supply side, the global manganese ore supply landscape underwent subtle changes, with some non-mainstream producing regions experiencing continued disruptions in shipment pace due to logistics, capacity, and other factors. Although supply from mainstream producing regions such as Australia recovered to some extent, partially easing supply pressure, this failed to alter the core pattern of overall tight global manganese ore supply.

Cost pressure has been transmitted across the entire chain to the EMM smelting segment. In addition to manganese ore, prices of core auxiliary materials such as sulphuric acid stayed high, with the dual overlay directly pushing up EMM smelting costs and significantly increasing production costs for China's EMM enterprises. Against this backdrop, even though current EMM prices pulled back slightly, enterprises' willingness to cut prices remained low, as rigid cost support effectively cemented the price floor for manganese, with significant downside room clearly constrained. Price trend side, after two consecutive weeks of consolidating at highs, China's EMM market saw rational price declines under the combined impact of multiple bearish factors. As of now, mainstream retail spot tax-inclusive ex-factory cash prices mostly pulled back to around 18,300 yuan/mt, with individual enterprises in some producing regions offering shipments as low as 18,100 yuan/mt to recover funds, and market transactions showed a divergent trend. Weak demand and tightening liquidity were the core drivers behind this pullback in manganese prices.

During the month-end phase, tender volumes from China's steel mills were sparse, traditional downstream demand remained sluggish, suppressing procurement demand for EMM. Meanwhile, prices of related products such as SiMn and FeMn declined in tandem, weakening overall support across the industry chain. Combined with cautious expectations at the macro perspective, market sentiment was further dragged down. In addition, industry-wide liquidity chains generally tightened at month-end, with some EMM enterprises facing cash collection pressure and proactively making slight price concessions to facilitate shipments. This caused the previously firm and stable manganese market to gradually weaken, with prices loosening and pulling back.

Looking ahead, as the Labour Day holiday approaches, China's EMM market is gradually entering a pre-holiday wait-and-see period, and market transaction activity is expected to decline. In the short term, cost side, rigid support remains in place, and manganese ore prices fluctuating at highs will continue to constrain the downside for EMM, limiting significant downside room. However, the weak demand landscape is unlikely to improve in the near term, and combined with unresolved liquidity pressure, EMM prices are expected to mainly move sideways in the doldrums in the short term, with declines remaining manageable.