SMM, May 13th: Supported by the cost of raw materials, the main manganese and silicon connection has been extended since mid-April, and the new high since April 18, 2022 has reached a new high of 9116 yuan/ton today, up 6.75% as of the day, floating red for 20 consecutive days, and the maximum increase in May reached 15.59%.
Manganese silicon main connection trend:
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Spot prices
According to the SMM spot price, today, the average spot price of silicon manganese 6517 (acceptance) in Inner Mongolia continued to rise, up 3.8% from the previous day, rising for six consecutive days. On May 10, according to SMM research, silicon-manganese prices were supported by costs and rose firmly. Steel Zhao has entered the market one after another, and the price of Southern Steel Zhao has exceeded 8,000 yuan/ton. In the short term, the silicon-manganese market may still be strong.
Changes in the average spot price of silicon-manganese 6517 (acceptance) in Inner Mongolia:
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Fundamentals
Supply side: In terms of output, according to SMM data, the total output of silicon-manganese alloy in mainland China in April was 778,000 tons, down 3.77% month-on-month and 13.15% year-on-year. On the whole, the operating rate in some areas decreased, coupled with the fewer natural days in April, the output of silicon-manganese turned to shrink, and the total output of silicon-manganese in April decreased.
Entering May, enterprises in cost-advantaged areas such as Inner Mongolia started to maintain. However, considering the strengthening of silicon-manganese cost support, the growth of silicon-manganese production is still under pressure. Therefore, the overall silicon-manganese production in May is expected to fluctuate little, or about 773,000 tons.
In terms of manganese ore, since late April, the price of manganese ore in various ports in the mainland has continued to rise, and the mainstream ore price has increased by about 5 yuan/ton, and some Australian blocks have been quoted at a higher price. Manganese ore traders are reluctant to sell, and the port is closed and does not quote. Affected by alloy prices, downstream alloy factories still maintain a low operating rate, and the transaction follow-up is relatively slow. Combined with market feedback, the sentiment of manganese ore price increase will continue to ferment in the short term.
South32's latest quarterly report said that due to the impact of Tropical Cyclone Megan, Australia's saleable production of manganese ore fell by 13% in the nine months from July 2023 to March 2024, and based on preliminary progress estimates, terminal operations and export sales are expected to resume in the third quarter of financial 2025 (Q1 2025), while alternative shipping options are being evaluated to mitigate the impact of terminal outages.
The price trend of manganese ore in major domestic manganese ore ports:
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Demand side: According to SMM's latest survey, the current spot price is high, the downstream steel mills are willing to purchase at high prices, and the spot transactions are few. In May, steel recruitment entered the factory one after another, and all parties held a wait-and-see attitude.
SMM outlook
On the whole, the supply of manganese ore at the supply end of the fundamental silicon-manganese is tight, and the ore price continues to rise, giving the manganese-silicon main company strong fundamental support in terms of raw material costs.