[Ferro-alloys.com]The Chinese manganese metal market continued to deteriorate over the last couple of weeks as prices lost support from both raw material and downstream industries. Chinese stainless steel prices have been losing ground since the beginning of this year, which has slashed demand for manganese metal, and as a result, most smelters have reduced their production capacity utilization to only 30-40%. The market for selenium dioxide continued to soften as lower manganese output has led to poor demand. Presently spot prices for manganese flake have dropped to a range of 12,300-12,500 yuan ($2,007-2,039) per mt VAT included, a low point since September 2013. Smelters were forced to trim their output as current prices were reported to be nearing, or even below, the production costs depending on each smelter’s ore and power supply costs.

Meanwhile, The Chinese government pledged at its recent Congress meeting that it will eliminate 27-million tons of annual steel capacity this year to address the oversupply issue, which is also affecting market confidence, sources said. In face of weak overseas demand and falling internal prices, export prices likewise eased to $2,070-2,130 per mt, FOB. South Korea’s POSCO bought 2,400 mt of manganese flake from Chinese producers in the past week, and its concluded price was cut to $2,085 per mt CIF Korea from last month’s $2,135 per mt.

China exported 25,828 mt of manganese metal in January, up from 4,487 mt in the same month of 2013. China canceled the 20% export duty in January 2013, which then caused a resurgence in the legitimate export market. Exports in the month (same 2013 period in parentheses) were: 6,427 mt (1,349 mt) to South Korea; 4,268 mt (1,585 mt) to Japan; 5,009 mt (693 mt) to Rotterdam; 2,803 mt (0) to India; and 2,191 mt (60) to the US. The average price in January was $2,121 per mt vs. $2,303 per mt in the same 2013 period.

• [Editor:Mike.zhang]