SMM Analysis of the Price Difference Between Spot SiMn and Futures in Jan

SHANGHAI, Feb 15 (SMM) - The most-traded SiMn contract fluctuated around 7,600 yuan/mt throughout January, with the highest and lowest point at 7,830 yuan/mt (up 1.32% from the high of 7,728 yuan/mt in December 2022) and 7,450 yuan/mt respectively (as of 10:15 am, Beijing time). The overall futures prices followed the price trend of ferrous metals. SiMn contract climbed all the way, with the highest price in mid-to-late January recording more than 7,600 yuan/mt. And the futures market was active.

In the spot market, the monthly average price hovered around 7,325-7,375 yuan/mt in cash. In January, coke prices have been raised for two rounds within the month. Prices of manganese ore were also on the rise, pushing up the overall cost of SiMn alloy. On the supply side, during the CNY holiday, some small SiMn alloy factories in south China shut down the operation for holidays. And the operating rates dropped owing to the power rationing in some parts of Guizhou. Those in the north maintained higher operating rates. Therefore, the overall operating rates increased. On the demand side, orders and shipments of SiMn alloy companies were good thanks to the downstream companies’ large-scale pre-CNY stockpiling.

Generally speaking, the spread between spots and futures in January was wide, and the market mainly traded with pricing over futures prices. The spot market generally witnessed the delivery of orders. The suppliers held their prices firm as the spot supply was relatively tight.