SHANGHAI, Sep 6 (SMM) – Manganese prices retreated from early highs in August as demand weakened on production cuts across products of #200 stainless steel, SMM believes.
SMM assessments showed that ex-factory prices of manganese in major production areas across China averaged 16,900 yuan/mt as of the end of August, down 11% or 2,100 yuan/mt from the start of the same month. Despite the sharp decline, 17,000 yuan/mt remains a relatively high level and could yield healthy profits for producers.
Many major Chinese producers of stainless steel imposed production cuts on products of #200 stainless steel.
Beihai Chengde cut a third of its output of the #200 series.
Baosteel Desheng would suspend production of #200 series products after it put its last blast furnace, which produces ferronickel with low nickel content, under overhaul from mid-October. The company has cut two thirds of its output of the #200 series.
Henan Jinhui put its blast furnace under maintenance for 15 days in August. This halved the company’s output and affected #201 hot-rolled products by 30,000 mt. SMM learned that the company maintained steady purchases of manganese in September.
Demand from other producers of #200 stainless steel products remains at normal levels. This includes Tsingshan Decent, the largest producer in China, and Lianyungang Huale.
Tight supplies provided some support to prices of manganese even as demand weakened. Ningxia Tianyuan, the world’s largest manganese producer, has not resumed its one plant. Producers in Songtao, Guizhou province, are unlikely to recover production in the short term. Most capacities in the south operated in high gear.
SMM research found that the manganese output across the country came in at 110,300 mt in August, and fell short of domestic and foreign demand.