China’s EMM Capacity to Expand Further in 2013

SHANGHAI, Apr. 22 (SMM) – China’s electrolytic manganese metal (EMM) capacity will likely hit over 3 million mt/yr in 2013. SMM estimates current EMM demand to be only over 1 million mt. This means 65% of EMM producers in China will be forced to close or exit out of the market.

EMM capacity in China was more than 2.45 million mt/yr last year. The commissioning of new capacity in Yunnan, Xinjiang, Inner Mongolia, and expansion of capacity in Guizhou, Chongqing, Hunan and Guangxi will aggravate overcapacity. 

EMM producers in Ningxia, Inner Mongolia and Xinjiang – new EMM production provinces, and those in Chongqing and Guizhou, old production provinces, have lower production costs due to lower power tariff and more abundant manganese ore there. As such, operating rates in these regions have always been 65-75%.

China’s EMM producers used to concentrate in Hunan, Guangxi, Guizhou, Chongqing and Hubei. Ningxia, Xinjiang, Inner Mongolia and Gansu are also home to EMM producers in recent years due to lower production costs in these provinces.