[SMM Analysis] SiMn Alloy Production in South China Showed Significant Growth in August, Cost and Demand Support Indicate Continued Production Potential in September

          China's total SiMn alloy production saw a notable increase in August 2025, rising both YoY and MoM. Regionally, the growth primarily came from south China, with Yunnan recording the highest output increase, while Guangxi and Guizhou also posted slight MoM production gains. Northern regions likewise showed varying degrees of output growth.

   The MoM production increase in August stemmed from two main factors. First, warm market sentiment boosted factory operating enthusiasm. Following late-July's national "anti-rat race" policy discouraging excessive price competition, strong price hike expectations emerged in the SiMn sector, driving futures prices upward. This positive momentum persisted through early-mid August, with SiMn alloy prices fluctuating at highs, bolstering producer confidence nationwide. Yunnan particularly benefited from rainy season electricity discounts, leveraging cost advantages to maintain active production. Second, HBIS' August tender showed both price and volume increases MoM, enhancing market delivery enthusiasm and transaction activity. Additionally, widespread hedging at high prices by north/south producers in early August effectively locked in profits while easing future shipment pressure - multiple tailwinds collectively driving output growth.

   September 2025 is expected to sustain this upward production trend. Inner Mongolia and Ningxia's cost advantages will persist, while Yunnan remains in its rainy season discount period, with most plants indicating no production cut plans. Meanwhile, the September-October peak season may boost downstream rigid demand. Pre-holiday steel mill restocking ahead of National Day could further stimulate SiMn alloy output.