SHANGHAI, Jan. 14 (SMM) –
Silicomanganese alloy markets remained relatively stable last week. As some steel plants raised bidding prices for raw materials, SiMn 65/17 prices in some of major producing regions rose by around RMB 50/mt from a week ago. With some steel plants conducting purchases for February, silicomanganese alloy market activity was comparatively good. Some silicomanganese alloy producers in north China quoted RMB 50/mt higher affected by firm manganese ore prices. Markets eyed electricity price subsidies in Guizhou.
Operating rates at domestic silicomanganese alloy producers over the past week saw no major changes and spot market supply remained relatively plentiful. Operating rates at producers in Inner Mongolia and Ningxia were still high since most producers maintained normal operations, but producers in Guangxi were not willing to resume production due to losses, despite falling electricity prices. Producers in Guizhou mostly maintained previous operating rates owing to no clear policy in electricity price subsidy, with some suspending production for worries over the implementation of the policy.
Steel prices rose appreciably last week, with some kinds of goods surging wildly. Prices for HRB335 rebar of 16-20mm averaged RMB 3,813/mt, up roughly RMB 132/mt or 3.6% from the prior week. According to SMM sources, the considerable increase in steel prices was due mainly to rising ore and coke prices, which was boosted by favorable domestic and overseas macro fronts. However, high steel prices lacked strong support in the face of sluggish demand period and faced risks to fall in the future. In SMM’s views, with severe weather and downstream producers gradually halting operations for the Chinese New Year holiday, steel prices may fluctuate in a narrow range over the short term.
With market optimism over future silicomanganese alloy markets strengthening slightly, steel plants have been purchasing actively recently, and some plants even began making purchases for February. More steel plants are likely to buy silicomanganese alloy for February in the coming week.
Imported manganese ore prices were still steady last week, helping some of steel products increase by RMB 0.5-1/mtu.
There was rumor that electricity subsidy will be cancelled in Gansu, but electricity prices may be slashed by RMB 0.0567/kwh in Guangxi in the coming week. Prices of coke particle and semi-coke maintained stable this week. Semi-coke stocks remained high at some producers and led to modest market transactions. Ex-works prices for semi-coke in Shaanxi’s Fugu were still between RMB 910-920/mt (in cash, including tax).
The decline of RMB 0.04/kwh in electricity prices in Gansu was cancelled following the New Year holiday. Electricity prices in Guangxi’s Guilin, Guigang, and Qinzhou were lowered by RMB 0.0567/kwh. Electricity prices in Guangxi were still high at RMB 0.6/kwh, but whether or not electricity price subsidy can be implemented in Guizhou remains unclear.
Prices of coke particle and semi-coke maintained stable last week. Coke prices trended higher during the week since stocks at some regions became low, while semi-coke prices remained slack in the face of continuously weak downstream demand, resulting in thin market transactions. Ex-works prices for semi-coke in Shaanxi’s Fugu were still between RMB 910-920/mt (in cash, including tax).
Steel plants will continue purchasing silicomanganese alloy aggressively in the coming week. Nevertheless, inasmuch as operating rates at producers remain high, spot silicomanganese alloy supply will remain sufficient. This means silicomanganese alloy prices lack rising momentum over the short term. But on account of high imported manganese ore prices and high electricity prices, silicomanganese alloy prices are unlikely to march down. As such, SMM anticipates that silicomanganese alloy prices will mainly fluctuate at current levels in the coming week.