Chinese manganese alloys enterprises suffer more in the wake of cutting by steel mills April purchase. Given high stockpiles and reducing demand, together with tight capital, it is predicated that manganese alloys market would not be in good shape during the whole April. In general, there are several key points to bring about huge affect on manganese alloys future market in terms of writer’s view.
In fact, steel mills have already cut output since mid-March for shrinking demand. What’s more, as slowing economic growth, traditional peak season for steel this year may come one or two month later to May- June than usual.
As for manganese alloys supply, the total output of silicon manganese during the first two months increased to 1.528 million tons on the basis of 1.414 million tons the same period of last year. In addition to that, high water season in south of China is around the corner, whether or not power readjustment would stimulate alloys factories to recover production that arouses participants concern.
From alloys production cost, imported manganese ore in China kept upward during the first three month followed BHP continuously lifted up future price. However, given ore prices have already put at high level, poor performance of alloys would make ore possible for showing tumble slightly in the near future.
As for Chinese policy on ferroalloy industry, in 2013, China will strengthen control on energy saving and emission reduction and step up reform pace for resource, energy prices and fiscal. Under such affect, there is no doubt that ferroalloys companies will face more capital pressure in terms of production cost. In recent period, increasing cost while poor sale has already forced more alloys factories into cutting output or shutdown, furthermore, government focus highly on polluting enterprises after the National People's Congress, under such influence, the next round energy-saving and emission check can impact on future manganese alloys market supply.
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