SHANGHAI, Feb. 18 (SMM) --

Supply:

Will China's EMM prices still have room to grow amid growing operating rates at EMM producers. SMM believes that China's EMM prices will meet resistance at USD 20,000/mt amid growing supply but waning demand in the following week. However, EMM prices will receive support from high prices of manganese ore, sulfuric acid and selenium dioxide as well as from the fact that operating rates will be curbed by limited manganese ore supply. SMM expects that EMM prices will move around RMB 20,000/mt in the following week.

Demand:

SMM believes that purchases from downstream stainless steel mills will be down significantly, despite of stock replenishments from stainless steel mills. According to SMM sources, some stainless steel mills had replenished stocks before Chinese New Year holiday. In addition, tight monetary policy made many stainless steel mills feel cash flow pressure, so mills lack capital support to purchase raw material. Besides, as some #200 stainless steel mills shifted production for #300 stainless steel, demand for EMM is waning. The above factors curbed demand for stainless steel, which is served as a reason to explain why EMM prices lack room to advance. Supply: Upstream EMM prices will gradual resume production after the Chinese New Year holiday, so supply of goods will increase. Meanwhile, cargo-holders who replenished stocks at prices between RMB 18,700-19,000/mt also plans to move goods, indicating ample supply in the market.

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