EMM Prices Faced Downward Pressure in December with Actual Demand Growth Missing amid Pre-Holiday Stocking Activities

SHANGHAI, Jan 10 (SMM) - The monthly average spot price of EMM in China's major producing areas rose 1.99% MoM to 16,043 yuan/mt in December. The monthly average export price of EMM stood at $2,275/mt FOB in December, barely changed from the previous month.

Major domestic EMM manufacturers resumed the production with stable output, contributing to sufficient supply in the spot market. However, the actual transactions only improved slightly as the pre-holiday restocking demand did not live up to the expectations. Therefore, the increase in market supply far exceeded the actual demand, and a surplus emerged again in the EMM market. The spot prices of EMM were on the wane in December, but the decline was smaller than the increase in November, thus the monthly average spot prices still posted a growth on a monthly basis.

The market has remained weak in January, 2023. Although some small factories already stopped the production ahead of schedule to take holidays, the output of large factories has been relatively stable. In this scenario, the oversupply still persisted in the market. In addition, with the upcoming Chinese New Year in the middle and late this month, the domestic buyers started to hold back from purchasing. As a result, the spot prices of EMM might decline further under the pressure of excessive supply.

In terms of exports, the overseas buyers reduced the purchases in December, and the average export price was relatively stable, according to SMM survey. However, there were rumours of EMM shortages in Europe at the end of the month, and the market price seemed to rise. Yet, the actual transactions were still sluggish.