Silicon manganese alloy prices in China were on a tear in the past fortnight due to China’s new standards on rebar specifications, we learned.
As of Tuesday June 26, silicon manganese alloy price across China averaged at 8,150 yuan/mt, up 8.7% from 7,500 yuan/mt seen on June 11. Such sharp increase in prices drove up production costs at steel mills, and some mills told us that the short supply has affected their production.
Earlier this year in February, China issued new standards for rebar produced in the country in a bid to crack down on inferior steel products such as quenched and tempered bar (QTB). The new standards spell out stricter requirements for alloy content, weight and dimensions as well as the tolerance levels of the various grades of rebar.
As the quenching and tempering process is banned, mills have to increase alloy use in production before the new standards take effect. This bolstered demand for silicon manganese alloy and drove up prices.
Besides, broad-based environmental reviews tightened silicon manganese alloy supply. Operations at manganese ore processors or silicon manganese alloy producers were limited or even suspended on environmental probes, especially in Guangxi and Inner Mongolia provinces. Sources from Guangxi Liuzhou Steel in the southwest, Jilin Tonghua Steel in the northeast and Hebei Tangshan Ganglu Steel in the north all said they have difficulty in buying silicon manganese alloy.