SHANGHAI, Apr. 9 (SMM) --
Supply
Supply of ore powder became more and more tight in Guizhou, Hunan, Xiushan and Guangxi provinces as well as in Xiushan of Chongqing. Most EMM producers can only buy low-grade ore powder (14-15%) with price to factory as high as RMB 900/mt (including tax), and the low-grade ore powder resulted in increased costs at EMM producers as it requires more ore and supplementary materials to produce to produce 10kt of EMM. In this context, costs at EMM producers have increased significantly, and are not expected to ease in the short term. Meanwhile, operating rates at EMM producers were still around 70% in China due t power rationing in Guizhou and Hunan provinces. Supply of goods remained at low levels.
Demand
Operating rate at large stainless steel mills were above 85%, but still unstable at small and medium sized stainless steels. In this context, it still takes time for demand from downstream steel mills to recover. Demand from alloy producers remained flat. Offers at exporting market were lifted, but trading volumes haven't increased in large quantity as overseas demand hasn't improved much.
Summary
Domestic supply of manganese is becoming more but tighter but demand of EMM is expected to recover stably, so EMM prices are expected to rise further. However, sluggish situation in downstream stainless steel mills will restrain EMM prices from rising significantly, and domestic EMM prices will move between RMB 15,500-RMB 15,800/mt temporarily.
To contact the writer on this report: jianghanmei@smm.cn
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