Weakly Review and Forecast on EMM Market-Shanghai Metals Market

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Weakly Review and Forecast on EMM Market

SMM Insight 06:34:02PM Mar 05, 2010 Source:SMM

SHANGHAI, Mar. 5 (SMM) --

Weekly Review

This week EMM prices climbed slightly from RMB 15,000/mt earlier this week to RMB 15,500/mt due to support of constantly rising costs at EMM producers as well as recovered demand from downstream consumers.

Supply

Most EMM producers kept firm offers due to slightly stable climb of raw material costs, and low inventory pressure is another season behind firm offers. The reasons behind limited supply of EMM were as below: firstly, operating rates at domestic EMM were 74%, and operating rates at small EMM producers with 5-10 kt capacity were even lower at 52%. Secondly, most medium and large producers had regular long term contract on hand and were under low inventory pressure, so producers were not eager to move goods.

Demand

Stainless steel mills gradually resumed production this week, but they only made purchases in an appropriate amount as they had already built raw material stocks during pre-holiday period. Traders made few purchases as they were concern over unclear market trend, and those traders with certain amount of inventories on hands mainly moved goods when prices were on upward track.
 

Time/Region
Domestic Market (RMB/mt)
Importing market (RMB/mt)
2010-3-1
15,000-15,100
2800-2850
2010-3-2
15,000-15,200
2800-2850
2010-3-3
15,100-15,300
2800-2850
2010-3-4
15,200-15,400
2800-2850
2010-3-5
15,300-15,500
2800-2850
Weakly Average Price
15210
2825
Change
+450
0
Data sources: SMM
 
 

Weekly Forecast

Supply

Electric power charges still hovered at high levels, strongly supporting EMM prices. In addition, most producers had low inventory levels, and EMM prices are expected to be still firm.

Demand

#200 stainless steel mills have gradually resumed operation, and producers still enter into the market to make purchase despite of sluggish market condition at stainless steel industry. Demand from manganese alloy sectors remains stable, and it still takes time for exporting market to warm up.

Summary

EMM prices will still have room to rise further due to support of costs and downstream demand, but large traders have relatively large amounts of goods on hand, which will increase market supply. In this context, EMM prices will decline to RMB 15,500/mt after reaching RMB 15,800/mt, and EMM prices will move in the RMB 15,500-15,800/mt range.
 

 

Negative Factors
Positive Factors
1. Traders have relatively ample goods on hand.
1. Costs at EMM producers climbed slightly in a stable pace.
2. Stainless steel industry hasn't improved and demand will be limited.
2. Operating rates at stainless steel mills gradually climb.
 
3. Producers have limited supply.
Data sources: SMM
 

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


 

Weakly Review and Forecast on EMM Market

SMM Insight 06:34:02PM Mar 05, 2010 Source:SMM

SHANGHAI, Mar. 5 (SMM) --

Weekly Review

This week EMM prices climbed slightly from RMB 15,000/mt earlier this week to RMB 15,500/mt due to support of constantly rising costs at EMM producers as well as recovered demand from downstream consumers.

Supply

Most EMM producers kept firm offers due to slightly stable climb of raw material costs, and low inventory pressure is another season behind firm offers. The reasons behind limited supply of EMM were as below: firstly, operating rates at domestic EMM were 74%, and operating rates at small EMM producers with 5-10 kt capacity were even lower at 52%. Secondly, most medium and large producers had regular long term contract on hand and were under low inventory pressure, so producers were not eager to move goods.

Demand

Stainless steel mills gradually resumed production this week, but they only made purchases in an appropriate amount as they had already built raw material stocks during pre-holiday period. Traders made few purchases as they were concern over unclear market trend, and those traders with certain amount of inventories on hands mainly moved goods when prices were on upward track.
 

Time/Region
Domestic Market (RMB/mt)
Importing market (RMB/mt)
2010-3-1
15,000-15,100
2800-2850
2010-3-2
15,000-15,200
2800-2850
2010-3-3
15,100-15,300
2800-2850
2010-3-4
15,200-15,400
2800-2850
2010-3-5
15,300-15,500
2800-2850
Weakly Average Price
15210
2825
Change
+450
0
Data sources: SMM
 
 

Weekly Forecast

Supply

Electric power charges still hovered at high levels, strongly supporting EMM prices. In addition, most producers had low inventory levels, and EMM prices are expected to be still firm.

Demand

#200 stainless steel mills have gradually resumed operation, and producers still enter into the market to make purchase despite of sluggish market condition at stainless steel industry. Demand from manganese alloy sectors remains stable, and it still takes time for exporting market to warm up.

Summary

EMM prices will still have room to rise further due to support of costs and downstream demand, but large traders have relatively large amounts of goods on hand, which will increase market supply. In this context, EMM prices will decline to RMB 15,500/mt after reaching RMB 15,800/mt, and EMM prices will move in the RMB 15,500-15,800/mt range.
 

 

Negative Factors
Positive Factors
1. Traders have relatively ample goods on hand.
1. Costs at EMM producers climbed slightly in a stable pace.
2. Stainless steel industry hasn't improved and demand will be limited.
2. Operating rates at stainless steel mills gradually climb.
 
3. Producers have limited supply.
Data sources: SMM
 

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