SHANGHAI, Jan. 8 (SMM) --
1) Market Review and Weekly Hotspot
This week, manganese prices climbed steadily and remained stable temporarily at RMB 15,000/mt from the level at RMB 14,500/mt due to tight electric power supply at manganese producers, increasing costs and expectation of purchase from downstream consumers.
Operating rates at manganese producers remained at 70%, and supply of manganese declined; prices of ore powder increased significantly, and costs at manganese producers kept on rising. Most producers were reluctant to move goods due to reduced supply and increased high costs.
This week, stainless steel market didn't improve, and trading volumes from stainless steel industries was low; although ferromanganese producers did have purchasing demand, they adopted a wait-and-see attitude due to steady climb of manganese prices. Most middlemen finished stock replenishment, and a wait-and-see sentiment was expending in the market. This week, middlemen only make purchases when they received orders from clients.
Supply of electric power was slightly tight and prices of ore powder were climbing.
Operating rates remains at 70% at manganese producers due to tight supply of electric power supply. Supply of manganese may decline further; meanwhile, raw materials like ore powder and sulfuric acid remained at high levels, and high costs will not likely to decline before the Chinese New Year holiday. Producers' interest in moving goods may be low due to support of high costs and tight supply of manganese from the market.
Although demand from stainless steel industry doesn't improve, stainless steel mills will replenish stock in a small amount to the end of January, and they will not make large amount of purchase next week; prices of imported manganese ore has climbed steadily, and demand of EMM from ferromanganese is increasing. However, most ferromanganese have adopted a wait-and-see attitude when manganese prices are high at present levels, and they have no plan to make purchase in a large amount; there are some inventories held by middlemen, and they will mainly remove goods and only make purchase in a small amount when prices are at high levels.
Prices will get support due to high costs (costs are above RMB 14,500/mt for 3/4 manganese producers) and tight supply of electric power, but currently most purchasers adopted a wait-and-see attitude although they did have purchasing need. It is expected that rising room for manganese prices will be limited next week, and prices will move around RMB 15,000/mt. Manganese prices will climb further when downstream demand is released in the future.
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