SHANGHAI, May 18 (SMM) – Operating rates at domestic EMM producers in Hunan Province and Guangxi Zhuang Autonomous Region have fallen noticeably owing to sluggish demand and production losses. However operating rates at those producers in Xiushan, Chongqing are increasing gradually. In this context, the average operating rate at Chinese EMM producers is still around 46%.
On the cost side, manganese ore and electricity prices remain stable this week. 98% of areas in China have experienced volatile sulfuric acid prices. Sulfuric acid prices hold stable in Hunan, but inch down by RMB 30-50/mt in Guangxi. Selenium dioxide prices sink by around RMB 15/kilogram. Therefore, the cost at major EMM producers falls between RMB 25-100/mt this week. Price changes in supplementary materials like selenium dioxide and sulfuric acid are limited, but there are rumors in markets that the government of Guangxi and Hunan may offer subsidies to their EMM producers with regard to electricity or manganese ore prices. SMM will follow the issue.
Demand remains slack for the time being, and supply is not seen to fall. Nevertheless, demand needs to be released as May ends and production costs remain high, so domestic EMM prices are unlikely to slide noticeably but lurch around RMB 14,700/mt instead in the coming week.