Home / Metal News / Copper / SMM Mn Survey: Manageable Inventory at EMM Producers
SMM Mn Survey: Manageable Inventory at EMM Producers
Feb 23,2010 18:11CST
smm insight
Source:SMM

SHANGHAI, Feb. 23 -- SMM has conducted a survey among 46 domestic EMM producers with the purpose to know the current situation of China's EMM producers in February 2010, and total production capacity of these 46 producers were around 642 kt/yr.

1) Production

There are 46 EMM producers involved in this survey, with total capacity at 642 kt/yr. According to the results, overall operating rates at EMM producers in February 2010 were 74.2%. Operating rates at EMM producers with capacity in the 20-100 kt/yr range were at 76.8%. (sample: 12 companies); operating rates at EMM producers with capacity in the 10-20 kt/yr range were at 74.8%. (sample: 24 companies); operating rates at EMM producers with capacity lower than 10kt/yr were significantly low at 52%. (sample: 10 companies); Although EMM prices lingered at low levels during February, operating rates at EMM produces were not low. According to SMM analysis, the reason behind this phenomenon is mainly attributed the increased long term contract. Since EMM prices were kept declining from January, and most downstream large steel mills and stainless steel mills which were under sluggish market condition believed that EMM prices will decline after the Chinese New Year Holiday. In this context, more and more companies choose to sign long-term contract. According to SMM survey, the reason why many producers still kept on production during the Chinese New Year Holiday is mainly attributed to the long-term contacts they signed till the end of February.

2) EMM Inventory

According to the results of the survey among 46 EMM producers, 31% producers told that they had low inventory levels as production of long-term contract accounted 90% of the total production volumes; 43% EMM producers told that they had moderate levels of inventory in the 100-500 mt range. Although operating rates remained at low levels, producers were unwilling to move goods since EMM prices kept on declining in February. The remaining 26% producers didn't tell the specific inventory levels. According to the results of the survey, 74% EMM producers told that they were not under high inventory pressure and the current inventory levels are manageable, which is mainly attributed to the following reasons. Firstly, since EMM prices have been kept on declining, production interest was not high at EMM producers. Secondly, Chinese traditional Spring Festival is in February, and many small producers were off on holidays during this period.

3) Psychological Outlook

SMM conducted a survey on psychological outlook among 13 companies of the 46 companies. 4 EMM producers told that  EMM prices will be on upward track from the beginning of March. It is because that many large stainless steel mills have already replenished stock before the Chinese New Year Holiday, and they will increase purchasing volumes from the beginning of March when operating rates at large stainless steel mills gradually climbed; 4 EMM producers believed that current EMM prices will not recovery temporarily, and EMM prices will be stagnated in early March since producers didn't have many inventories on hand; other 5 producers told that future market trend was not clear. With regard to the psychological outlook, 60% producers as well as downstream steel mills and stainless steel mills were not clear of future market trend and adopted a conservative attitude towards future market trend.

To contact the writer on this report: jianghanmei@smm.cn

 

Copyright © SMM. All Rights Reserved

None of this material may be used for any commercial or public use in any forms or means, without the prior written consent of SMM. For reproduction issue, please contact us by email: service.en@smm.cn
 

Manganese Cobalt Silicon Tin Bismuth
minor metal price
Mn Co Si Sn Bi

For queries, please contact Frank LIU at liuxiaolei@smm.cn

For more information on how to access our research reports, please email service.en@smm.cn

Related news