With strong cost support, SiMn alloy prices still have upside room [SMM Analysis]

In the futures market, the most-traded contract fluctuated around 8,656 yuan/mt in May. The highest settlement price was 9,742 yuan/mt, up 25.87% MoM from 7,740 yuan/mt, and the lowest at 6,062 yuan/mt. The market showed strong volatility in May. With cost support, SiMn alloy prices continued to rise.

In the spot market, due to the continuous rise in manganese ore prices and the increase in manganese-rich slag prices, the cost of SiMn alloy kept rising, resulting in significant fluctuations in the total production cost. Currently, there is still a certain cost difference between North China and South China, with Inner Mongolia enjoying an advantage in electricity and electricity prices in other regions fluctuating sideways. Due to strong futures prices in May, producers were reluctant to sell at low prices, leading to relatively strong spot prices.

Additionally, according to SMM, given the strong performance of SiMn alloy upstream such as manganese ore prices as well as high manganese-rich slag prices, the SiMn alloy price trend may have bullish expectations in June. Attention should be paid to whether future cost changes and supply-demand momentum can drive a price trend shift.