With Cost Support, SiMn Alloy Prices Surged in May [SMM Analysis]

In May, the average price of 6517 SiMn alloy in North China was 7,920 yuan/mt (by cash), up 31% MoM; in South China, the average price was 8,008 yuan/mt (by cash), up 29.2% MoM.

On the supply side, due to high-priced manganese oxide ore, cost support was strong, leading the spot price of SiMn alloy to show an upward trend in May. Therefore, SiMn alloy producers with manganese ore inventory had a strong willingness to increase production due to the expanding profits. As a result, the total output of SiMn alloy nationwide increased in May. Overall, most SiMn alloy producers were willing to resume production with previously stocked low-price manganese ore, while a few chose to purchase high-price high-grade manganese ore for resumption of production.

On the demand side, due to real estate purchase restriction relaxation and the trade-in policy, steel mills increased output in May, improving the demand for SiMn alloy.

In terms of raw materials, due to the continuous rise in the prices of manganese oxide ore and manganese-rich slag, the production costs of SiMn alloy smelters in both northern and southern China continued to rise in May, providing stronger cost support.