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SMM Weekly Forecast on China's EMM Market
Jun 25,2010 17:21CST
smm insight
Source:SMM

SHANGHAI, Jun. 25 (SMM) --

Supply

Raw material costs have already lowered to RMB 300-400/mt, and some producers in west Hunnan province may resume production, which may deal a blow on EMM market that is in supply surplus amid sluggish demand. However, the fact that operating rates in Chongzuo and Baise in Guangxi province lowered again due to ore powder supply shortage can not be ignored, which may help offset the increased output from west Hunan province.

Demand

#200 stainless steel market was sluggish with high inventories, and stainless steel mills that had halted production had no plan to resume production. In this context, purchasing volumes from stainless steel sector will continue to be limited; Ferroalloy producers strengthened efforts to cut production, and purchases for EMM from this sector will also be sluggish; steel mills will invite regular bids, but pries offered by them will not surpass market price level; and traders also have few purchasing volumes due to sluggish market condition.

Analysis

Sentiment between suppliers and purchasers stagnated, with suppliers standing at a slightly unfavorable position, and prices may have risks to fall to RMB 14,500/mt. However, low operating rates in Guangxi province may be magnified by the market, and prices may climb to test RMB 15,000/mt. In summary, short position power was slightly stronger than long position power, and EMM prices may hard to make any breakthrough.

To contact the writer on this report: jianghanmei@smm.cn

 

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