[SMM Analysis] EMM Market Continues to Weaken, Short-Term Weakness Hard to Reverse

Recently, China's EMM market has been experiencing a pattern of slight decline followed by temporary stability, with a persistent weak downward trend. Although the decline has slowed and there have been no consecutive sharp falls, market pessimism remains strong, and downward pressure persists.

Spot market: Offers continue to weaken, with frequent emergence of low-priced cargoes.
Currently, rational downward adjustments are seen in EMM retail spot market quotes, with mainstream ex-factory cash-including-tax quotes concentrated in the range of 17,900-18,100 yuan/mt. Some producers in remote areas and traders further lowered quotes to accelerate shipments. The market trading atmosphere is sluggish. Buyers downstream exhibit a pronounced “rush to buy amid continuous price rise and hold back amid price downturn” mentality, with strong wait-and-see sentiment, only maintaining procurement of small orders for essential needs. The lack of bulk procurement demand further exacerbates the weak market pattern.
Steel mill tender market: Price reduction intensifies.
Steel mill tender prices continue to weaken, becoming the core factor dragging down manganese prices. Yesterday, some steel mills’ new round tender prices for manganese metal balls and manganese metal ingots, including tax and acceptance delivery, were pushed down to 17,980-18,800 yuan/mt, with some steel mills seeing a decline of as much as 520 yuan/mt MoM from the previous tender, reflecting a strong desire to push for lower prices. Meanwhile, steel mills’ raw material inventories are at high levels, and procurement strategies have become more conservative, leading to a significant shrinkage in tender procurement volumes. Against the backdrop of weak demand and profit pressure, steel mills prioritize digesting inventories and reduce external procurement, further weakening market demand support and intensifying pessimistic expectations for the future market.
Core reasons for the decline: supply-demand imbalance + weak demand + pessimistic sentiment
Supply-demand pattern is loose: The operating rate of the EMM industry remains high, supply-side pressure persists, and coupled with sell-offs by traders triggered by earlier price declines, market circulation of goods is ample. Downstream demand is weak on two fronts: The steel industry has entered the traditional off-season, with end-use demand recovery in real estate and infrastructure slower than expected, leading to sluggish steel mill procurement demand. In the new energy sector, procurement in the LMO and LMFP industries is cautious, with insufficient rigid demand follow-through, making it difficult to provide effective support. Market sentiment is pessimistic: The continuous price decline has shattered market confidence, forming a negative feedback loop of “the more it falls, the more they wait and see; the more they wait and see, the more it falls,” with pessimism spreading to the entire industry chain.
Market outlook: Short-term weakness will persist; watch key signals from steel mill tenders.
Overall, the current EMM market lacks significant positive support, and the weak downward trend is unlikely to reverse in the short term. EMM prices are expected to continue the weak and volatile pattern in the near term, with further declines possible.