SHANGHAI, Jun. 24 (SMM) -- A recent survey of 77 EMM producers (total capacity 1,194.kt/yr) revealed that operating rates at EMM producers in May fell by 16.3% MoM to 53.7%. An estimated output of EMM in June in China was approximately 96.7 kt based on current operating rates, given that China's capacity of EMM is 1.8 million mt/yr in main producing regions like Guangxi, Guizhou, Hunan provinces and Chongqing.
Operating rates at EMM producers with capacity less than 10 kt/yr lowered significantly. This is attributed to the fact that many producers without strong competitiveness were forced to halt production due to higher production costs caused by electricity price hike when EMM market was sluggish.
According to statistics by regions, operating rates at EMM producers in West Hunan province were down by 32.7% to 36.2%. This is mainly due to production suspension caused by uncertainties from electricity price adjustment. In addition, environmental crackdown during mid-June also attributed to significant decline of operating rates at that region; operating rates at EMM producers in Tongren, Guizhou province were also down significantly, as more and more producers opted to halt production given that operating costs are higher than prices; operating rates at EMM producers in Baise and Chongzuo, Guangxi province have always stayed at low levels, and operating rates at this region remain unchanged this month. However, operating rates are expected to decline significantly in June with the intensification of ore power supply shortage; operating rates at EMM producers in Xiushui, Chongqing city remained stable around 82% due to cost advantage, as produces in that region mostly use local electricity grid.
Monthly average price of EMM was 14,470/mt as of June 24th, down RMB 555/mt from the level in April at RMB 15,025/mt.
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