Silicon and manganese are subject to inventory pressure when they return from the Spring Festival in 2019. Manufacturers have reduced prices to clear storage and reduced the operating rate to varying degrees. In April, environmental protection inspection in Shizuishan area of Ningxia, some silicon and manganese production enterprises cut off production. In May, the national silicon and manganese production decreased by 1.55% compared with April, and the northern silicon and manganese production fell by 1.13% compared with April. As a result, the spot market of silicon and manganese has been tight since May, and the spot price has warmed up, but only 75-150 yuan / ton.
However, since June, the spot market is still difficult to change the "shortage tide", according to some manufacturers and traders revealed that in mid-and early June, boosted by downstream market demand, Tangshan, Fujian and other places have replenishment, transfer demand, but manufacturers and traders have given no single row, no goods to adjust the answer, so silicon and manganese prices rose, including tax cash factory price straight to 7600 yuan / ton. In such a price increase, how can the alloy factory miss it? The national market output of silicon and manganese increased significantly in June, 6.98% higher than that in May, and 8.88% higher than that in May in the north.
In July, according to SMM research, the northern Si-mn alloy manufacturers have carried out maintenance in the high price market, mainly because of the problems of the furnace body, so it has to be overhauled. According to current statistics, three ore heating furnaces have been overhauled, and the furnace types are all above 30000KVA. Two of them are expected to be overhauled for 20 to 30 days, and the other is for short-term repair, which is expected to be 7 to 10 days. At the same time, one 20000KVA is expected to be overhauled, but the details have not been determined. If all the four ore furnaces are overhauled as expected, the output of silicon and manganese is expected to be reduced by about 19000 tons. At the same time, last week, Ningxia Hongguozi Silicon Manganese Alloy Factory carried out environmental acceptance (the rest of Shizuishan has not yet had the news of reproduction), it is understood that the environmental acceptance work has been basically completed, the acceptance results are generally good, the local capacity involved in the monthly capacity of about 14000 tons, if the successful resumption of production can be executed production of about 10, 000 tons, but the local industry personnel said that the date of resumption of production has not been set, failed to meet the expected short-term resumption of production. Therefore, it is unlikely that the spot situation in the northern market will improve in July.
According to the National Bureau of Statistics, the national crude steel output in May was 89.091 million tons. According to SMM steel data, the PMI composite index in May 2019 was 51.10, down 7.86 from the previous month and up 0.13 from the same period last year. After the adjustment, the composite index was 51.26, down 2.80 from the previous month and 0.08 from the same period last year. SMM estimated that crude steel production in June would not change much from May. At the same time, the PMI composite index in June 2019 was 46.54, down 4.56 from the previous month, and 0.03 from the same period last year. After the quarter adjustment, the composite index was 51.63, up 0.25 from the previous month, and down 0.38 from the same period last year. Generally speaking, the PMI composite index in June was lower than 50 before the quarter adjustment, and higher than the 50 withered glory line after the quarter adjustment. The downstream industry as a whole entered the off-season, and some industries showed a significant decline affected by seasonal factors. This month's composite production index was 44.20, down 7.61 from the previous month, up 0.46 from the same period last year, with the exception of transportation infrastructure and shipbuilding industries, showing varying degrees of decline this month. Therefore, the demand of steel mills in the lower reaches of the river may decline to a certain extent in July, and the production restriction policy in Tangshan and other places also provides some support for this judgment, and crude steel production is expected to fall by 2.24%. Combined with the corresponding terminal capital construction and downstream thread market, the actual demand of silicon and manganese may be reduced by 24000 tons compared with the proportion of materials used in the steelmaking process.
To sum up, the overall supply and demand of the northern market is still in a relatively balanced state in July, and it is difficult to substantially increase spot prices in the short term, and the situation of extremely short-term shortage of traders or steel mills may still occur. Silicon and manganese prices can be supported in the news surface and local supply and demand sides, falling prices may be less likely in mid-July, and some regions may even continue to raise quotations. It is worth noting that the southern market is affected by the resumption of production and start-up and the high water season, the southern production has a continuous increasing trend, and a small amount of spot inventory has been revealed in some southern traders. Combined with the weak expectations of steel in August, the increase of silicon and manganese production willingness, as well as the comprehensive impact of post-maintenance recovery and new ore heating furnace, the medium-and long-term market still needs to be operated cautiously.