This week, manganese prices experienced slight decline under the context that downstream purchasers adopted a wait-and-see attitude and buying was gradually quiet. EMM prices fell from RMB 15,600/mt at the beginning of this week to RMB 15,200/mt at the end of this week.
Operating rates at manganese producers were around 65%, and supply of manganese further declined; costs at manganese producers kept on rising as prices of ore powder were firm and stayed at high levels, and as prices of sulfuric acid and selenium dioxide continued to climb.
This week, wait-and-see sentiment expanded in the market and transactions were few due to steady climb of EMM prices for many days and due to the fact that demand didn’t improved substantively at stainless steel mills. Although ferromanganese producers' demand for EMM increased, steady climb of EMM prices also significantly increased costs at ferromanganese producers. However, they had not choice but to make purchase in an appropriate amount because they have to deliver goods to steel mills according to the orders singed between them.
Tight supply of electric power will not change before the Chinese New Year holiday, and operating rates will still remain at low levels; prices of raw materials like ore powder, sulfuric acid and selenium dioxide will remain stable at high levels, and will not decline before the New Year holiday. Constantly climbing costs and steady decline of supply will give strong support for EMM prices.
Steel mills will increase purchasing volumes at the end of this month, and lower EMM prices will generate some purchasers' interest in replenishing stocks at stainless steel mills before the Chinese New Year holiday, although stainless steel market is not improved recently; traders will also take the opportunity to make purchase when prices falling down next week.
Although purchasers mainly adopted a wait-and-see attitude when prices falling down, some of purchasers whose demand is oppressed when prices were high previously will be attracted to replenish stock when EMM prices fall to RMB 15,000/mt which is the reasonable prices that most market players can accept. In this context, increased purchasing volumes at lower prices will push up EMM prices again, but prices will not increase significantly due to limited demand at downstream consumers. It is expected that EMM prices will move in the RMB 15,000-15,500/mt next week.