Cut Off the Output of production, Ferroalloys Producers save market
Ferro-alloys.com Breaking: on May 18,Chinese Manganese Top 40 producers made online meeting , and analysed the current market situation and decided to cut off the output by 45% from then on.
The prices of Silicon manganese dropped to 8200yuan/mt ,dropepd over 10% in one week , and ferro Silicon prices dropped from 11500yuan to 8800yuan for 72% grade.Managanese Flakes dropped to 15000yuan from 25000yuan/mt exw..
What was the the reasons drove down the prices of ferroalloys?
From Demands side, Chinese crude steel output were reduced about 25%, due to Virus epedimic everywhere in China, the infrasture projects, manufactures, logisitc were affected, Shanghai is the Economy center of China, has locked down over 60days, and affected over 4000 enterprises and Export and Import. That was big influenced to Shanghai Economy Development in 2Q,of the year. The domestic demands decreased sharply but the supply of ferroalloys has not reduced relatively. For Example, SiMn plants fully operated and consumed about 2.6millon tons of Mn ore very month , and pushed up the price of Mn ore. Now, due to big drop of price of alloys, which it made great lose to all smelters.
From Supply of Ferroalloys side,all plants fully operated, and the inventory volume is growing up. One big producer of SiMn said that they have huge inventory, could not sell at this price level .
Due to the slide down of economy growth affected by Virus, The commodities prices of ferroalloys, Iron ore, steels and coal dropped in Future Exchange in this week.
There is no way to change the market, unless the reduction of supply, the top 45 producers decided to cut down their production capactity immediately and stop to buy Manganese ore at current high price.
That is right decison at moment, like Calcium silicon, calcium metal, Calcium carbide, maganesium producers, they meet same situation and some of them already decided to stop or maintain their furnaces and cut down the production valume in order to stop the drop of price.
For good aspect , the prices will be bottom up very soon , if the supply were in deed reduced and The Locked down were lifted in Shanghai ,part area in Beijing, and Zhengzhou. The Chinese currency value is reverting up while the situation of economy of China will be changed to positive trend in 3Q.