SHANGHAI, Aug 17 (SMM) – China’s silico-manganese alloy is unlikely to be oversupplied for the rest of the year as new capacity would find it difficult to catch up with demand, SMM expects.
As growing demand pushes up prices of silico-manganese alloy, many new capacities are scheduled to be commissioned in the second half of the year. However, not all of them would go ahead as planned due to potential delays in construction.
SMM expects additional monthly output to be up to some 40,000 mt in the remaining months of the year while demand growth is likely to be more.
China’s new standards on rebar specifications, effective from November 1, have been bolstering the demand for alloy since its issuance earlier this year.
The new requirement would deter mills from adopting the quenching and tempering process to produce rebar. Manganese content in quenched and tempered bar (QTB) is about 0.3% lower than that in non-QTB. SMM learned that more than half of Chinese mills are still adopting such process to produce rebar.
Data from China Iron and Steel Association (CISA) showed that its member mills produced 207.24 million mt of rebar in 2017. SMM estimates that about 8.5 million QTB was produced every month. This means that demand for 6517 silico-manganese alloy would grow at least 40,000 mt per month.
Some mills told SMM that actual silico-manganese alloy consumption jumped some 80% to meet the new standards, compared to adopting the quenching and tempering process.