SHANGHAI, Mar. 25 (SMM) -- A survey on 73 EMM producers with total capacity of 1.18 million mt/yr reveals the following insights. Operating rates were 70.7% in March 2010, and an estimated output of EMM was in the 100-110 kt range in March, as China's capacity of EMM is 1.8 kt/yr in main producing regions like Guangxi, Guizhou, Hunan provinces and Chongqing.
Operating rates were 78.9% at EMM producers with capacity exceeding 20 kt/yr (sample:15 companies); operating rates were 61% at EMM producers with capacity in the 10-20 kt/yr range, including capacity of 10 kt/yr and 2 kt/yr (sample: 42 companies) and operating rates were 79% at EMM producers with capacity less than 10 kt/yr (sample:16).
1. Large scale EMM producers with capacity exceeding 20 kt/yr can keep certain profits due to reasonable control of costs, and producers may waste financial expenditure if they lay a portion of production idle. In this context, large scale producers basically maintained stable operating rates.
2. EMM producers with capacity in the 10-20 kt/yr range produced the largest volumes of EMM. However, current EMM market was in a sluggish situation and costs still hovered at high levels, so most medium-sized producers were unwilling to take the risk to work at high capacity.
3. Small EMM producers gradually lifted the operating when EMM prices increased in the first two weeks after the Chinese New Year holiday. Although EMM prices fluctuated down, producers opted to adopt a wait-and-see attitude before making any production suspension plan.
Operating rates at EMM producers in Guangxi province were 62% (sample:18 companies); operating rates at EMM producers in Guizhou province were 61% (sample:16 companies); operating rates at EMM producers in Hunan province were 86% (sample:23 companies) and operating rates at EMM producers in Chongqing were 73.3% (sample:16 companies).
1. High costs, coupled with current supply shortage of ore powder at EMM producers in Guangxi province made operating rate stay around 60%.
2. Low operating rates in Guizhou province is mainly caused by severe drought in that region, and around 1/3 or 1/2 electricity supply was restricted at a portion of producers in Tongren region of Guizhou province.
3. Operating rates were the highest in Hunan province, which is attributed convenient supply of ore powder as well as relatively lower electricity prices. Although current EMM market was sluggish, producers in Hunan province still had certain profits.
4. Operating rates in Xiushan, Chongqing was relatively balanced, but operation at certain producers was affected by environmental investigation, resulting relatively low operating rates.
Costs at EMM producers will slightly down with the approaching the high water period in April, and operating rates at EMM producers will climb stably by then.
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