EMM Prices in China Inch Up on Falling Supply

SHANGHAI, Jul. 23 (SMM) – Mainstream quotations of EMM were RMB 11,500-11,700/mt on July 22. Although consumption was sluggish, suppliers were reluctant to sell at lows, pushing EMM prices up slightly. 

The average operating rate at EMM producers across China has now fallen to around 38%, with monthly output at 73,000-75,000 mt, Shanghai Metals Market has found. EMM supply and demand are now basically balanced, allowing EMM prices to inch up. Despite the slight rise in EMM prices, those who have halted production will not resume operations for the moment since EMM prices remain below production costs. As such, EMM output will not increase further for the immediate term, which will lend support to EMM prices. 

That being said, any upside space of EMM prices will be limited due to mounting inventories over the past two months and lackluster downstream demand. SMM thus expects EMM prices to hold at RMB 12,000/mt for the near future.