As Chinese mainstream steel mills settled January purchase on raw material, silicon manganese spot price kept downturn with around RMB50-150/mt. Up to now, Hebei Iron and Steel Group knocked down silicon manganese 6517 to RMB7,100/mt, while Shagang Iron and Steel also lowered purchase to RMB7,200/ mt from RMB7,350/mt despite increasing volume in advance given Spring Festival approaching. In addition to that, Angang group planned to further cut on the basis of RMB7,150/mt for initial enquiry due to comparative sufficient stockpiles and low purchase from Hebei Group.
In fact, cold weather gives rise to transport fee increase; furthermore, low purchase from steel mills also disappointed alloys activity for operation, those with little capital flow and inventory pressure declined to sell products. In south areas, high power price but low sale contributes to growing number of factories shutdown, only those with direct long term cooperation with steel mills can maintain running.
In conclusion, reduced spot resource would help to silicon manganese price stop dropping in the future since operation rates further fall.