Output of Silicon-Manganese Alloy Stood at 969,400 mt in April in China

SHNAGHAI, May 9(SMM) -  The domestic output of silicon-manganese alloy stood at 969,400 mt in April (including 54,000 mt of high-grade silicon manganese, 915,400 mt of regular silico-manganese), down 4% on the month and 4% on the year, according to SMM estimate.

The domestic output of silicon-manganese alloy stood at 2.7752 million mt in January to April, a decrease of 2% year on year. According to SMM research, the market of silicon-manganese alloy remained unchanged in April.

First of all, terminal transport was restricted by the pandemic and demand for silicon-manganese alloy was limited. With slow digestion of silicon-manganese alloy inventory and much spot, the prices of silicon-manganese alloy were lack of upward momentum in April.

Secondly, the costs at alloy plants were high affected by the high prices of raw materials. Quotations stood at 8,400-8,500 yuan/mt(in cash). Despite of few shipments, factories were unwilling to lower the prices with the support of high costs. Therefore, the market of silicon-manganese alloy was in a deadlock in April with prices moving rangebound.

Prices were fluctuated on the raw material side in May.

Firstly, prices of coking coal and coke saw the first round of declines with bearish expectations in the market, which are expected to fall by 500 yuan/mt.

Secondly, the quotations of overseas manganese ore have been announced with a slight decrease, but the costs of picking up ore remained unchanged as the exchange rate of Chinese yuan rose.

In addition, miners held firm to the prices with concentration of some manganese mining rights, but as the supply of manganese ore was rather sufficient, the prices have not much growing space.

In consideration of the above reasons, SMM suggests to be cautious about the bullishness in silicon-manganese alloy market in May and the market shall pay more attention to changes in cost. If quotations of manganese ore loosen, the production costs of silicon-manganese alloy will fall and the prices of silicon-manganese alloy may move in a downward trend with oversupply.