Higher prices for imported manganese ore, coke and coking coal, freight rates, as well as weak demand in the domestic market have led to a rapid increase in the cost of production of manganese alloys in China, SteelMint reports. To change the situation, a special committee of the Association of Ferroalloy Producers of the country at the end of October 2022 proposed to reduce production by 50%. 40 member companies agreed with this. Similar activities were already implemented in May 2022.
China is the world's largest producer of ferroalloys - the volume of their production in the country is about 36 million tons per year (over 78% of world production).
Reducing the production of ferroalloys in China will affect both domestic and global markets. This may lead, in particular, to a decrease in demand for manganese ore and an oversupply in the world market and, as a result, to a fall in prices for this raw material in the short term.
The reduction in production in China will lead to a shortage of supply in the domestic market. Therefore, there is a high probability of an increase in domestic prices for ferroalloys and, as a result, prices in world markets.
