What’s Impact on China’s Manganese Industry from Latest Environmental Protection? SMM Reports

SHANGHAI, Dec. 12 (SMM) - China’s central government environmental protection inspection team investigated 7 provinces and cities recently. How did China’s recent environmental protection inspections affect the manganese industry chain?

SMM’s survey finds that steel prices have been inflated after this round of inspections. Steel output in the 7 regions inspected due to environmental protection accounted for 11.56% of national total in 2015. When combined with output cut and suspension in Hebei Province due to previous measures taken to improve the hazy weather starting mid-November, steel prices entered upward track. Steel prices remained strong last week.

With regard to manganese alloy, these 7 regions only represent less than 6% of China’s total alloy output, compared to 80% in last round of environmental protection inspections. So any effect from latest environmental protection inspections on the alloy market was very limited. But effects on the steel market in turn dampened manganese alloy demand, SMM added.

On the EMM output front, two EMM plants in Hubei had remained in production previously, with daily output of around 120 tonnes and 50 tonnes, respectively. In Chongqing, six had maintained production, with output totaling 11,500 tonnes in November, SMM understands. After the environmental protection inspections were executed, one EMM plant in Hubei suspended half of production line December 4, with daily output down to 60 tonnes.

Only one EMM producer in Chongqing remains in production as of December 9, and daily output is 50 tonnes. Other EMM plants mostly ceased production December 4, and when to restart is still indeterminate. Almost all manganese mines in Chongqing also closed, and did not decide when to restart. Daily output in the two regions fell about 400 tonnes due to environmental protection inspections, which accounted for about 10% of national total based on November’s output.

The manganese industry chain includes manganese ore-EMM-stainless steel, and manganese ore-manganese alloy-crude steel.

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