Influenced by global economic crisis, market demand sharply contract and manganese alloys runs in low level. What’s more, high tax duty greatly impairs manganese alloys competitive in international. Shrinking export and expanding import volume bring about great challenge on manganese alloys participants.

I. Domestic Market Fluctuated

 

As silicon manganese for example, Stocking of mills makes silicon manganese quotation a little bit up before Spring Festival. However, lacking of strong support, silicon manganese quickly enters slipping trend. During May and June, better steel trend stimulates silicon manganese begin to keep stable, then, tight supply in market makes silicon manganese quotation hit a new high this year in August. With poor perform of steel market, silicon manganese begins to fluctuated until the end of November. Since power price readjustment on Nov,20^th, increasing production cost and limited power policy make a large number of plants in suspending condition, which pushes silicon manganese price in uptrend.,

 

II. Shrinking in Export Market

High export duty makes China lost export advantage comparing with other countries like Brazil, South Africa, Ukraine and India. In 2009, silicon manganese export quotation concentrated on USD1,200-1,300/mt in the first half year, and USD1,300-1,400/mt for the second half year.

As for HC ferromanganese 65#, domestic market quotation concentrated on RMB6,500-7,500/mt. Shrinking demand of oversea results in China’s HC ferromanganese export volume sharply down. During traditional slack season, China exports HC ferromanganese only several hundred tones.

III. Future Prediction

Many Uncertain Factors in Future Market

 

1：Better Economic Tendency

China’s economic further shows sign of recovering. Public project start work need more investment, increasing demand on railway and public road, growth investment in real estate as well as expand demand on household electrical appliances and automobile, all of which will bring about expanding demand on crude steel in the future.

 

2：Contracting Export and Increasing import Volume

Affected by financial crisis, international market demand sharply decreases with comparative low sale price comparing with China. In addition, 20% export duty and revival oversea trade protectionism as well as impose Anti-dumping duty on China's SiMn. What’s more, importing on ferroalloys of China will further expand. All these factors will contribute to severe competition in domestic market.

 

3：Uncertainty and Instability on import manganese ore

There are still uncertainty and instability on import manganese ore and domestic ore produced in China as well as other fuel with fluctuated market price and might rising on power.

 

 

It is figured that domestic manganese alloys market would continue to turn better by the end of 2009 and 1Q 2010. However, manganese alloy market price might still stand at low level, and there is huge pressure on producers.

 

MSN： jiangyitao-yy@hotmail.com

 

Review on 2009 EMM Market and Prediction for 2010

Generally, China’s electrolytic manganese market kept stable in 2009, though price has changed a little in some periods. For electrolytic manganese of China, the whole year of 2009 featured with softened policy, steady domestic market and weak oversea demand.

 

Firstly, industrial policies did not put great pressure to the plants until the end of the year, when electricity price increased. There were not any new policies on export duty, industry admittance or elimination of backward production capacity. Production capacity and output of China’s electrolytic manganese is believed maintain around the former level.

 

Secondly, domestic price did not fluctuate much. During the whole year, highest price was RMB14,500/mt domestically and USD2,800/mt FOB, while lowest was RMB12,000/mt and USD2,200/mt FOB.

 

Thirdly, export market demand weakened and China’s export volume of electrolytic manganese flakes dropped sharply. Up to November 2009, China’s total export of electrolytic manganese flakes was only 82,778 tons, and the yearly export is expected to be less than 90,000 tons, the lowest in 21^st century.

 

Prediction for 2010:

One of the most important changes on electrolytic manganese industry in 2010 would be the back of strengthened macro-control by the government. Backward capacity elimination list has been published, with a few of minor plants of manganese involved. Export duty of unwrought manganese would not be changed in 2010, but it seems that new policy towards manganese briquettes could come out at any time.

 

Another difficulty, also partly the result of tightened policy, is the increasing production cost of electrolytic manganese plants. It is said that current cost in some areas is already as high as over RMB14,500/mt, while market price is only around RMB14,000/mt.

 

It is predicted that in 2010 the market price of electrolytic manganese would continue to keep stable generally, but plants would have more pressure, especially for minor ones. Also, export market would not be optimistic and is expected to maintain the similar level of this year.

 

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Editor: Jasper

MSN: electrolyticmanganese@hotmail.com