China Silicomanganese Alloy Market Movement (2013-4-23)

SHANGHAI, Apr. 23 (SMM) – Steel plants are expected to purchase goods in May. According to SMM sources, most alloy producers reported they had lowered prices sharply, but were still pessimistic toward the market, seeing price decreases between RMB 50-100/mt. besides, electricity prices in south China have yet to be adjusted, so some steel plants will likely postpone purchase schedule after the Labor Day holiday given sufficient inventories.

On the steel market side, large numbers of steel plants have extended their maintenance period since late year's end, or expanded maintenance. Domestic crude steel output in March fell by 3.15% MoM, but steel inventories hit a record high. With weakening profits, steel plants were forced to cut output for maintenance. Of the 38 domestic hot rolling producers, 4 conducted maintenance in April, while 33 of the 42 M&H plate producers will likely cut output, with 10 of the 67 wire producers expected to cut output. Domestic steel industry has been in surplus, and new urbanization policy fails to resolve the problem. The steel industry needs to survive by acceleration outdated capacity elimination and transforming based on advanced production mode and competitive products.