SHANGHAI, Jun. 28 (SMM) -- Mainstream offers of EMM were between RMB 14,800-14,900/mt on June 23rd. Many producers still halted production, and most smelters kept offers relatively firm.
SMM believed that the EMM price movement shall be closely affected by the following two factors. Firstly, production suspension factor. According to SMM survey, operating rates were only 36.2% in west Hunan province, and producers that had already halted production had no plan to resume production due to possible higher electricity charges at RMB 0.67/kWh; production suspension at producers in Congzuo and Baise region of Guangxi province may increase due to tight ore powder supply. In this context, supply of EMM will really become tight. Secondly, demand from downstream consumers. According to SMM sources, sluggish situation of stainless steel sector may hard to improve, and producers that conducted unit maintenance or cut production had no plan to resume production. In this context, consumers'demand for EMM may continue to be sluggish.
SMM believes that EMM prices may slightly climb if production suspension aggregated, but any room for prices to climb will limited given the sluggish demand. If EMM producers that had halted production gradually resumed production, prices may be under pressure to fall slightly.
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