Silicomanganese alloy prices in the Chinese spot market have ceased its downward trend from early July amid improved sentiment, as tenders from steel mills are just around the corner at month-end.?
As of Tuesday July 24, offers were heard in the north at 8,000 yuan/mt ex-factory in cash, up from 7,800-7,850 yuan/mt last week.
Higher spot prices indicated a tighter supply even though a mill tender for August was settled at a lower price than for July. Jiangsu Shagang concluded its August tender at 8,370 yuan/mt on Tuesday, in acceptance with tax included, 230 yuan/mt lower than July, we?learned.
The drop was considered minor by market participants, who are now keenly awaiting the tender result at a large-scale steel group in Hebei in the next week.
While operating rates of domestic silicomanganese alloy plants rebounded in?early July after the month-long environmental reviews, the increase in overall supply was limited given lingered impact on major producers. The increasing inventory of manganese ore at Tianjin port also suggested that operating rates remained relatively low.
This is despite high profit margins of silicomanganese, as increasingly stringent environmental inspections make it more challenging for these plants to resume to full operations.
We assessed #6517 silicomanganese alloy in north China at 8,050-8,150 yuan/mt ex-factory in acceptance as of Tuesday, flat from a week ago. Prices in acceptance are typically around 100 yuan/mt higher than those in cash.