SHANGHAI, Jun. 24 (SMM) - SMM survey found that operating rates at major domestic EMM producing regions remain 50% at the moment, with monthly output at roughly 98,000 mt. SMM estimates that domestic and export demand for EMM is a mere 80,000 mt per month, resulting in nearly 20,000 mt of EMM in surplus each month. Coupled with growing supply in May, EMM supply is now in severe oversupply.
On the cost side, prices of manganese ore, the major raw materials of EMM, are high due to tight supply, and prices of power and sulfuric acid fell only slightly, with price decline in power in major EMM producing regions not enough to reverse losses at EMM producers. SMM estimates that production costs at most EMM producers are now RMB 12,100/mt, but oversupply may drag EMM prices down below RMB 12,000/mt in this coming week.