SMM Review of SiMn Alloy Contract Prices

The most-traded SiMn alloy contract prices moved around 6,835 yuan/mt in May, with its highest settlement price down 1.22% month-on-month to 7,136 yuan/mt, and its lowest settlement price at 6,534 yuan/mt. There was a significant volatility in SiMn alloy contract prices. Prices moved at lows amid an imbalance between supply and demand.

In terms of the spot market, there was a difference in the cost between north and south China. The overall prices of manganese ore and coke continued to decline. In addition, electricity prices in south China were adjusted. Despite a high overall cost, the production loss has eased compared with before. The output gradually grew. The profits in the main production areas in north China were acceptable, and Ningxia’s electricity prices were also lowered. Enterprises were thus enthusiastic about production. The overall output increased month-on-month.

SMM understood that SiMn alloy contract prices fell sharply with steel prices. Arbitrage operations between the spot and futures markets and profits from futures contracts prompted some companies to sell spot cargoes with low prices. That drove down prices offered by SiMn alloy plants.