Electrolytic manganese metal prices have risen as increased domestic demand coupled with reduced run rates at most plants tighten supplies further, sources said Thursday.
Platts assessed 99.7% manganese at $2,170-2,220/mt FOB China Thursday, up 1.4% or $30/mt from the previous week. Meanwhile, industry sources pegged the domestic price at Yuan 13,000 ($2,148/mt), up 1.6% or Yuan 200/mt from the week before.
Tycoon Manganese, a major producer based in South China's Shenzhen province, has not sold any electrolytic manganese metal into the international market, a company source said.
"Domestic demand has been rising with many local buyers restocking since the Lunar New Year holidays are less than a month away," the source said.
The company sold about 500 mt this week to domestic buyers at Yuan 13,100/mt, up Yuan 200/mt from the previous week. With several producers starting to cut their run rates, offer prices have been going up, market sources said.
The source from Tycoon Manganese said, however, that the company had no plans to cut operating rates.
The Hongxin Group ran out of cargoes for January in November last year. Since then, the company has reduced its run rates ahead of the Lunar New Year holidays. The company currently produces 2,000 mt of electrolytic manganese metal each month, down from 3,600 mt/month earlier.
"With our current production output, we are unable to meet our domestic contractual agreements. However, we have already talked to our customers and they have agreed to allow us to supply whatever shortfall we owe them in March or April," a Hongxin source said.
"Currently, most producers would rather sell in the domestic market since liquidity is tight. Dealing with overseas customers would mean they wouldn't see their money coming in until a week later. Also, many want to wrap up any outstanding agreements as soon as possible before retreating from the spot market," a Shaanxi-based trader said.
Electrolytic manganese is commonly used as an alloy agent for steel production. China is the biggest producer of electrolytic manganese metal in the world.