SHANGHAI, Mar. 17 (SMM) – Prices for electrolytic manganese metal (EMM) in China dropped to as low as RMB 12,200/mt last week due to lackluster demand. #200 stainless steel mills were little interested in building up stocks against sluggish steel market. The current overhang of EMM is turning most market players bearish toward future EMM prices.
EMM demand looks set to remain anemic this week given the depressed #200 stainless steel market and production cuts at some steel producers. New EMM capacity in Xinjiang has come online, with current output at 1,000 mt per month, which will add to oversupply pressure. Manganese ore prices and electricity tariffs remain high, and sulfuric acid prices continue to rise. As such, the decline in selenium dioxide prices alone will not lead to significant drop in EMM production costs. SMM believes there is little room for EMM prices to fall further after sliding to RMB 12,000/mt since prices have already fallen below marginal costs.