SHANGHAI, Jul 15 (SMM) - In June 2022, the average ex-factory price of spot EMM (in major producing areas) rose slightly by 0.7% MoM to 15,300 yuan/mt.. The average monthly price of EMM was $2,378/mt FOB in June, an increase of 0.3% MoM.
In terms of market events, environmental protection inspections in the so-called "manganese triangle” (major producing areas) were relatively strict at the beginning of the month, and the daily output was maintained at about 100 mt, fuelling bullish sentiment in the manganese market. However, due to the slow destocking of stainless steel mills’ finished products and the weak demand for EMM, the market forces were in play intensively, capping the momentum of EMM prices. News of production cuts by downstream stainless steel mills frequently stirred the market. At the same time, the news of the "Manganese Alliance" calling for a 40-50% reduction in production also "bombarded" the market. Nonetheless, the EMM plants were mostly wait-and-see ahead of the tenders organised by leading steel mills, and only a few answered the call amid heavy financial pressure and ore supply uncertainties.
Market sentiment is even more mixed entering July amid sluggish terminal demand. Based on the on-going tenders, though steel mills aggressively force down the raw material prices, EMM prices are more resilient amid strong cost support. In addition, the current "Manganese Alliance" call for production reduction is mostly toward EMM plants in the south. Except for a few plants that stopped the production in June, most of them stand on the sidelines. On the whole, stainless steel mills have greatly curtailed the production due to losses, and terminal demand is unlikely to improve in the short term. And EMM prices are likely to stop falling and stabilise only when the manufacturers reduce the production, otherwise the prices may fall further.
In terms of exports, overseas steel mills are currently in the summer break with little demand, and are wrestling with domestic sellers. According to SMM, the actual transaction price is one lower than $2,250/mt on a FOB basis, with great pressure from overseas buyers. It is learned from domestic exporters that because EMM prices have cost support, the domestic manufacturers have refused the bids from overseas and refrained from making quotes. On the whole, EMM prices are likely to pivot with the end of overseas summer break when the demand will pick up, and the prices may maintain the downward trend in July.