Strong cost support, SiMn prices remain stable temporarily [SMM SiMn Daily Review]

On August 6: As of Wednesday this week, the price range of SiMn alloy 65/17 (cash) in the northern market was 5,675-5,775 yuan/mt, down 25 yuan WoW from Wednesday last week; in the southern market, the price range of SiMn alloy 65/17 (cash) was 5,700-5,800 yuan/mt, down 25 yuan WoW from Wednesday last week.

This week, the SiMn market has been consolidating.

Cost side, in terms of spot, the price of manganese ore at Tianjin Port has been fluctuating at highs and remained stable for the time being. At Qinzhou Port, due to the relatively concentrated supply of South African manganese ore, miners have been reluctant to sell at low prices, increasing the difficulty of price negotiations for alloy plants. The acceptability of alloy plants for the price of South African ore has slightly increased. Early this week, the prices of South African high-iron and medium-iron manganese ore at Qinzhou Port slightly increased. SiMn plants continue to purchase as needed, and the prices of other ore types have remained fluctuating at highs. In addition, the fifth round of coking coal price increases has been implemented, with prices steadily rising, providing strong cost support for the futures and spot prices of SiMn alloy.

Supply side, this week, the futures have been fluctuating at highs, and the market sentiment remains warm. The production in the northern and southern markets has been stable this week. It is understood that most SiMn alloy producers had smooth shipments at the end of July, and their inventories have decreased. At the beginning of August, they arranged production orders to maintain stable production and replenish inventories. Therefore, the inventory pressure is small, and SiMn alloy producers are reluctant to sell at low prices. Meanwhile, due to the fluctuations in the futures, producers have a wait-and-see sentiment. Some producers have held back from selling, waiting for higher prices in steel tenders and SiMn futures.

Demand side, based on recent tenders and purchases by northern and southern steel mills, the delivery-to-factory price (cash, tax included) has been concentrated around 6,100 yuan/mt, slightly lower than the high prices in previous tenders. However, under the strong cost support of SiMn, it is difficult to purchase SiMn at low prices. Amidst the negotiations between both parties, the price of SiMn has been fluctuating at highs.