China: Silico manganese prices extend decline amid weak demand

Prices fall further w-o-w on sluggish market sentiment

High inventories, weak steel demand weigh on market

Chinese silico manganese prices (Mn 65%, Si 17%) declined further w-o-w to RMB 5,6806,020/t ($834884/t) exw, compared with RMB 5,7906,090/t ($850895/t) in the previous week. The market remained weak, as subdued downstream demand and persistent oversupply continued to outweigh limited cost support.

Market updates

Oversupply and weak cost support

Silico manganese prices weakened further amid high inventory levels and sluggish spot trading activity. Although operating rates in southern regions remained restricted due to high electricity costs, overall supply pressure persisted because of elevated warehouse stocks and ample market availability.

Meanwhile, manganese ore prices remained stable to slightly weak amid high port inventories and subdued transactions. Falling ore prices offset the impact of higher coking coal costs, limiting overall cost support for alloy producers.

Weak steel demand keeps buyers cautious

Downstream steel mills maintained cautious procurement strategies amid weak finished steel demand and declining tender prices. Buying activity remained largely need-based, while continued pressure from steel mills on procurement prices further weakened market sentiment and producer margins.

Outlook

Chinas silico manganese prices are expected to remain weak and range-bound in the near term, as high inventories, weak steel demand, and subdued procurement activity continue to weigh on the market. Any meaningful recovery may depend on supply cuts or stronger downstream steel demand.

(With inputs from CBC)