Downstream demand remains weak; SiMn alloy fluctuates downward [SMM Analysis]

In the futures market, the most-traded contract in September fluctuated around 6,156 yuan/mt. The highest settlement price at 10:15 was 6,548 yuan/mt, down 3.54% MoM from last month's 6,788 yuan/mt, with a low of 5,958 yuan/mt. The market experienced significant volatility throughout the month, and under the supply-demand imbalance, SiMn alloy prices fluctuated downward.

In the spot market, there is still some cost difference between north and south China. In September, manganese ore and coke prices were weak, with Inner Mongolia maintaining its electricity cost advantages, while electricity prices in other regions showed little fluctuation. Due to the decline in raw material prices, SiMn alloy production costs decreased, alleviating some production losses for SiMn alloy plants. Overall, north China still holds cost advantages. Supply side, the main production areas in north China saw little fluctuation in production due to lower costs. In south China, severe production losses led to no production resumption plans for previously halted SiMn alloy plants, resulting in a slight decrease in production. Demand side, September's downstream demand for SiMn alloy did not meet the expectations of the traditional peak season, and steel mills showed weak enthusiasm for purchasing SiMn alloy. Overall, the oversupply situation in the SiMn alloy market has not changed, and spot SiMn alloy prices are trending downward.

Additionally, according to SMM, entering October, steel mills' production schedules are expected to increase, showing stronger enthusiasm for purchasing SiMn alloy. However, SiMn alloy production remains high, and combined with previous inventory, the oversupply situation in the SiMn alloy market has not yet eased. With limited downstream demand support, SiMn alloy price outlook is expected to remain weak.