SHANGHAI, Feb. 5 --
This week, trading sentiment was sluggish in domestic manganese market, and manganese prices were moving narrowly in the RMB 14,700-14,900/mt range.
Supply: Operating rates at domestic manganese producers were around 70%, and supply of manganese was relatively ample in the market; more and more EMM producers were willing to move goods for cash due to cash flow pressure as the Chinese New Year holiday is approaching. This week, low-priced supply was frequently heard in the manganese market.
Demand: More than 50% stainless steel mills in Ningbo and Dainan had already halted production, and purchasing demand for production was very limited. In addition, sluggish market condition still didn't improve, and most downstream stainless steel mills are not expected to replenish stocks. Most traders believed prices would decline in the future, and purchasing volumes were low this week.
Pre-Chinese New Year Holiday
Domestic manganese prices will not change much one week before the Chinese New Year Holiday, and will prices will move narrowly in the RMB 14,700-14,900/mt range. More and more EMM producers under cash flow pressure will move goods with low prices, and there will be more low-priced goods in the market.
Post-Chinese New Year Holiday
Demand: Currently, around 50% stainless steel mill have already halted production in Ningbo and Nainan, and the producers will not resume production until the end of February, so purchasing demand from stainless steel mills will be limited after the Chinese New Year Holiday.
Supply: Buying interest of manganese has not been strong since the beginning of February, and only limited output at EMM producers has been consumed. However, operating rates at EMM produces are around 70%, and most EMM producers have no intention to halt production during the Chinese New Year Holiday. In this context, inventories at EMM producers will be greatly increased. Meanwhile, prices of raw materials like ore powder are expected to fall along with gradually warm weather, and prices of sulfuric acid will also have difficulty in staying at high levels. In this context, price support from costs at EMM producers will be weakened gradually.
Sluggish demand will not change after the Chinese New Year Holiday, and supply of manganese is relatively ample in the market. In addition, price support from cost will gradually wane. In this context, EMM market is unlikely to improve from the end of February to the beginning to March. However, SMM reminds that more than 80% stainless steel mills have no raw materials available, and EMM prices may have room to climb once they begin to make purchase in the market.
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