SHANGHAI, May 25 (SMM) – On the demand side, #201 stainless steel markets remained weak this week. With regard to LH/2B, mainstream traded prices in Wuxi held at RMB 11,900/mt this week, but prices in Foshan slid to RMB 11,700/mt. Steel traders did not build up stocks in the face of slack demand. Despite stable price quotes, actual traded prices tended to slide.
On the supply side, the average operating rate at major Chinese EMM producers hovered around 46% last week. Operating rates lurched low around 30% at producers in Hunan and Guangxi owing to higher electricity and ore prices. EMM producers in Qiushan, Chongqing and Guizhou enjoyed higher operating rates of around 65% on advantageous electricity and ore prices, while operating rates at those in Ningxia and Hubei were little changed. On the cost side, manganese ore prices held stable, while sulfuric acid prices were also unchanged. There is possibility that electricity prices in Hunan will be lowered in the high-water period, but without documents seen for the time being, but electricity prices in Guizhou and Guangxi remain the same through the year. Electricity prices in Xiushan Chongqing will be cut by RMB 0.02/kwh in late May. Selenium dioxide prices were slashed by RMB 50/kg this week. Based on composite statistics, the cost for major EMM producers slid by around RMB 75/mt this week.
Manganese ore and electricity prices will remain steady in the coming week, but selenium dioxide prices are expected to fall further. In this context, the cost for EMM producers will inch down. SMM holds the view that domestic EMM prices will likely hover between RMB 14,500-14,700/mt in the coming week.