SHANGHAI, Jan. 12 (SMM) -- Today, mainstream offers of EMM were in the RMB 15,000-15,300/mt range. Downstream consumers adopted a wait-and-see attitude due to steady climb of manganese prices although they did have purchasing need. However, manganese producers were still reluctant to move goods and expected price increases due to support of costs.
It was reported that downstream stainless steel mills and ferromanganese producers had limited inventories, and they did have to make purchase to meet production need and to replenish stocks before the Chinese New Year holiday. However, according to downstream enterprises, they could only adopted a wait-and-see attitude temporarily at present, since costs of raw materials climbed steadily while downstream market didn't improve yet and since they had very limited profit and might suffer losses to make purchase at current prices. Meanwhile, according to SMM, middlemen controlled inventories at low levels to avoid risks and most traders in Ningbo, Shanghai and Dainan told that they had limited supply of goods in local market. However, middlemen told that they would only make purchase when received orders from clients or only move a portion of inventories in virtue of unstable market trend and high purchasing prices.
It was also reported that tight supply of ore powder in Guizhou, Xiushan in Chongqing and Hunan were deteriorating, and prices of manganese ore powder remained at high levels due to increased purchasing volumes from manganese producers and reduced supply of ore powder when Chinese New Year holiday is approaching. In addition, most producers told that high grade ore powders were rarely seen in the market and most manganese producers could only purchase low grade ore powder with higher prices, because more and more manganese producers rushed to make purchases. In this context, costs at manganese producers were definitely pushed up. Further more, producers' interest in moving goods weakened significantly since prices of sulfuric acid and other raw material remained at high levels and supply of electric power was tight.
SMM believes EMM prices will get strong support and will not decline in the short term due to high costs and reduced supply in the market. Although downstream consumers adopted a wait-and-see attitude which lowered rising pace of EMM prices, prices are expected to rise further after a slow climb since purchase volumes will increase in the future.
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