Major Chinese steel mills cut manganese alloys’ purchase prices for May

Major Chinese steel mills have lowered their purchase prices for silico-manganese and ferro-manganese to control costs amid a weak manganese alloys market.

Major Chinese steel mills have lowered their purchase prices for silico-manganese and ferro-manganese to control costs amid a weak manganese alloys market.

Hebei Iron & Steel Group, the country’s largest steel mill, lowered its purchase price of silic-manganese to 6,950 yuan ($1,119) per tonne for May delivery, down 150 yuan from its April levels, sources told Metal Bulletin. This is the fourth consecutive month of price cut from the mill.

The steel mill lowered its ferro-manganese purchase price by 150 yuan from last month to 6,150 yuan per tonne for May delivery. “Hebei Steel’s price drop is 50 yuan more than we expected and hit the already weak market,” a trader from Shanghai said.

Shagang Group, the largest private steel mill in the country, also lowered its purchase price of silico-manganese to 6,950 yuan per tonne for May, down 50 yuan from April. All prices include delivery and payment in an acceptance draft.

Manganese alloys smelters have no way but to cut output to reduce the risk of loss, especially in the northern regions of the country where operating rates are at 50-60% at the moment, market participants said. Operating rate of smelters in the south is less than 20-30% as cheaper power prices seen during monsoon have not kicked in yet, according to sources.

Spot prices of silico-manganese and ferro-manganese stayed bearish in the week, with silico-manganese at 6,550-6,850 yuan per tonne and ferro-manganese at 6,150-6,250 yuan per tonne, both unchanged from last week.

With firm prices from overseas manganese miners, traders in China continued to hold their offers for spot manganese ore although trade remained light.

Traders were offering spot Australian 46% lump at 46-47 yuan ($6.1-6.2) per mtu and 38% lump ore from South Africa at 39.5-40.5 yuan ($5.1-5.3), both on a free-on-train Tianjin basis.

editorial@metalbulletinasia.com

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