SHANGHAI, Mar. 10 (SMM) -- Mainstream offers of EMM were in the RMB 15,100-15,300/mt range. Most downstream stainless steel mills and traders adopted a wait-and-see attitude and purchased limited goods, resulting in slight decline of domestic EMM prices.
It was reported that domestic EMM prices began to climb from RMB 14,500 on February 22nd to RMB 15,500/mt on March 5th, up RMB 1000/mt only within two weeks. However, trading sentiment at domestic EMM market was not brisk due to limited demand resulting from producers' low interest in resuming production as well as production restriction by other factors.
With regard to the reasons behind price increases of EMM prices, most market insiders believed that prices were pushed up by costs. According to SMM data, prices of raw materials did climb, with prices of sulfuric acid rising by RMB 30-50/mt and prices of selenium dioxide rising by RMB 50/mt. Prices of ore powder which is the major raw material for EMM production stayed flat, and total costs of EMM increased by RMB 180-200/mt.
It is quite obvious that increases of EMM prices are far more than increases of EMM costs, so costs contributed limited to EMM price hikes. In this context, domestic EMM prices began to fall constantly from the beginning of this week given the unimproved demand and the bubbles at EMM prices.
SMM pays close attention on supply and demand of EMM to see whether domestic EMM prices will continue to fall or not. As EMM prices were constantly growing after the Chinese New Year holiday, operating rates at EMM producers with capacity in the 5-10 kt/yr range increased significantly. Meanwhile, it still takes time to consume existing EMM inventories given the limited trading volumes. In this context, domestic EMM prices will still have room to fall further due to increasing supply but unimproved demand from the market.
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