SMM Weekly Forecast on China EMM Metal Market (Apr. 23-27)

SHANGHAI, Apr. 20 (SMM) –In the face of sluggish stainless steel market, only Guangdong Zhangpu Stainless Steel Metal Material Co., Ltd. and Lianzhong Stainless Steel Corporation have plans to scale back production in April, with the latter mainly cutting #200 stainless steel by around 26%. However, production at most steel producers will be little changed during April and May.

Operating rate at electrolytic manganese metal (EMM) producers is 46% at present, and output is around 83,500 mt. EMM producers in Huayuan County, Hunan Province have suspended production or withheld goods due to an increase of RMB 500/mt in costs since electricity prices there are raised, affecting output of 6,000-6,500 mt/monthly (which is the supply volume of the county at present).

Therefore, SMM believes the market is now close to a balance in demand and supply, given a drop in sources (according to SMM estimation, domestic EMM demand is about 75,000 mt/monthly, and owing to production suspension or producer reluctance in selling, there is now no market surplus of 8,500 mt). Domestic EMM prices will fluctuate around RMB 15,000/mt in the coming week.