SHANGHAI, Dec. 31 (SMM) --
1) Market Review
This week, manganese prices climbed steadily, advancing from RMB 14,100-14,500/mt range along with invitation for bids from downstream steel mills.
Supply:
Operating rates remained at 74% at manganese producers and supply of manganese was relatively ample. However, invitation for bids from steel mills brought some long-term contract to manganese producers, and supply of spot goods reduced correspondingly. Most manganese produces were reluctant to move goods as prices of raw materials moved up.
Demand:
Invitation for bids from large steel mills brought certain amount of purchasing volumes for manganese market, and prices to factory were in the RMB 14,600-14,800/mt range, which helped to increase confidence of manganese market; purchasing volumes from downstream stainless steel mills didn't increase and it still needs time for stainless steel industry to recover; purchasing volumes from traders were limited, as most traders adopted a wait-and-see attitude since they had already finished stock replenishment previously.
Forecast:
Supply:
Operating rates remains at 74% at manganese producers and supply of manganese will be relatively ample. However, manganese produces may be quite reluctant to move goods as prices of raw materials are expected to continue to advance.
Demand:
Demand of EMM from steel mills have already released since steel mills have already finished invitation for bids; Stainless steel market is not expected to recover and purchase before the Chinese New Year holiday has not began yet, so stainless steel consumers will maintain regular purchase next week; traders' purchasing interests wane and wait-and-see sentiment grow under the situation that manganese prices climb steadily but downstream demand hasn't improved.
Analysis:
Manganese market sentiment may stagnate next week due to the high cost support from upstream and sluggish purchasing volumes from downstream. Next week, manganese prices are expected to move in the RMB 14,500-14,800/mt range.
Negative factors
1. It still needs time for the recovery of stainless steel industry.
2. Steel mill will have a 20-30 day holiday, so stock replenishment from steel mill may not be that optimistic.
3. Traders still hesitant to make purchase.
Positive factors
1. Supply of electric power is tight.
2. Prices of sulfate acid continue to grow.
3. Steel mills replenish stock in small amount.
4. Traders may replenish stock before the Chinese New Year holiday.
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