SHANGHAI, Jun. 29 (SMM) – Guizhou executes electricity price policy during the low and high-water period for the time being, and electricity prices for EMM producers there are lowered by RMB 0.05/kwh. The Guangxi government subsidizes RMB 0.04/kwh for EMM producers that consume more electricity in June than April, which thus see sharply falling production costs. Moreover, sulfuric acid prices inched down by RMB 30/mt, and selenium dioxide prices also fell marginally. Based on this, SMM estimates that average production costs at major EMM producers are generally between RMB 14,300-14,400/mt.
Production costs have dropped noticeably, but demand remains very weak. Besides, EMM producers have to pay for electricity fees and staffs at the month-end. Domestic EMM prices retreat to RMB 14,400-14,600/mt this week, moving away from the RMB 14,600-14,700/mt range in nearly three weeks.
Demand is not seen to improve, and the operating rate at most EMM producers is around 49%. Against this backdrop, domestic EMM prices are likely to fall slightly to around RMB 14,300/mt in the coming week.