China: Silico manganese prices remain subdued despite cost pressures and supply tightening

• Supply pressure and cost support dynamics
  
  
• Slow demand recovery restrains price gains
  
  

Chinese silico manganese prices (Mn 65%, Si 17%) declined by RMB 200/t ($29/t) w-o-wto RMB 5,950-6,250/t ($870-914/t) ex-works. The market softened slightly amid ongoing uncertainty in supply-demand fundamentals. While several producers have initiated output cuts, strengthening expectations of tighter supply, market participants remain cautious about the extent and consistency of their implementation.

On the demand side, steel mills have begun resuming operations, offering some support; however, the recovery remains gradual and has yet to translate into a strong or sustained uptick in demand.

Market updates

Elevated costs support firm ore market

The silico manganese raw material market remains resilient, with elevated manganese ore prices exerting significant cost pressure on producers. Increased quotations from global miners and firm domestic port prices continue to support the market.

While supply from major exporters remains stable, higher freight and energy costs are adding to overall expenses. Demand is still strong due to relatively high operating rates, though ongoing production cuts may gradually soften manganese ore consumption.

Gradual demand recovery limits price upside

Procurement demand from downstream steel mills is recovering slowly, but the pace remains slow. Recent bidding activity in East China offers price references, yet large-scale bulk buying is still absent.

Steel mills show cautious purchasing behavior, balancing rising production with strict cost control. While improving end-user demand is supporting alloy consumption, comfortable inventory levels limit urgent restocking. Overall, demand recovery provides some support, but weak market confidence continues to restrain any sharp price increase.

Outlook

Silicon manganese prices are expected to remain range-bound in the short term, as tentative supply tightening is offset by sluggish demand recovery, while elevated input costs continue to provide underlying market support.

(With inputs from CBC)