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Analysis and forecast of market outlook and price trend of China's silicon manganese industry in 2017

read:25 time:2017-10-20 11:21

Silicon manganese is an alloy composed of manganese, silicon, iron and a small amount of carbon and other elements, is an important steelmaking raw materials, in the national economy occupies a very important strategic position, of which the steel industry with manganese consumption of 90%-95%, mainly as a deoxygenator and desulfurizer in the process of iron and steel metallurgy and used to manufacture alloys, chemical industry, building materials industry and other fields of manganese demand. Steel is better reduced by adding manganese ferroalloys, which enhances the toughness, hardness, strength and elasticity of steel. Similar to silicon iron, China's silicon manganese industry is also in a state of disarray, overcapacity problem is serious. Unlike silicon iron, silicon manganese production is dispersed, but under the influence of policy and electricity prices, there is a trend of migration from south to north.

 

In recent years, unlike the trend of de-production capacity in the steel industry, China's silicon manganese production capacity has been increasing, from 150.0 million tons in 2011 to 23.798 million tons in 2016, with an annualized growth rate of nearly 10%. The production capacity of silicon manganese in the south and north of China shows different trends. In 2011, silicon manganese production was concentrated in the southern Guangxi and Hunan regions, close to manganese minerals, with a total production capacity of 6.70 million tons, accounting for 44.7% of the national output in that year. Corresponding to the rapid growth of silicon manganese production capacity in Inner Mongolia, Ningxia and Gansu regions in the north, the total production capacity of the three regions in 2016 was 9.774 million tons, accounting for 41.1% of the national production capacity.

  Distribution of silicon manganese production capacity in China from 2011 to 2016 (tons)

  


  Source: Public information collation

In 2017, inner Mongolia, Ningxia and other places plan to build a number of large-scale silicon manganese projects. According to China Iron Alloy Online, Ningxia Tianyuan Manganese Industry is expected to invest a total of 36.97 billion yuan, the implementation of 2×350MW self-owned power plant, 420,000 tons of electrolytic metal manganese phase IV and 1 million tons of high-silicon silicon manganese-based 16 new projects and 2×500,000 tons of desulfurized manganese slag and other 5 renewal projects; Inner Mongolia Cohan Co., Ltd. intends to invest 400 million yuan to build 20×30,000KVA silicon manganese ore furnace project; Tsa right front flag new iron alloy co. , Ltd. intends to invest 400 million yuan to expand the annual output of silicon manganese alloy 200,000 tons project, the project is mainly built 4× 36000KVA fully enclosed ore furnace supporting 50 square meters belt sintering furnace and 1 6300KVA refining furnace; Inner Mongolia Puyuan Alloy Limited Liability Company plans to invest 480 million yuan in the construction of 2×31500KVA silicon manganese ore furnace project.

 

China's silicon manganese production in 2016 was 7.5385 million tons, a decrease of 25.89 percent year-on-year. During the same period, the output of Mongolia and Ningxia increased significantly, reaching 218.49 and 200.08 million tons, respectively, up 100.67 percent and 52.22 percent year-on-year, with operating rates of about 66% and 50%, respectively. In Guangxi and Guizhou, the output showed a downward trend, with a start rate of less than 30%. There are significant north-south differences.


  Annual production of silicon manganese in the main producing area (tons)

  


  Source: Public information collation

As of 2016, the world had 690 million tons of manganese reserves, mainly in South Africa, Ukraine and Australia, accounting for 29.0%, 20.3% and 13.2% of global reserves, respectively. China's manganese reserves are relatively small, at 44 million tons in 2016, accounting for only 7.1% of the world's reserves.

  Distribution of manganese reserves in 2015

  


  Source: Public information collation

In 2015, China's manganese ore reserves of 276 million tons, of which 50.7% is located in Guangxi, the next mine manganese mine is China's only large-scale manganese mining area of more than 100 million tons. According to the National Mineral Resources Plan (2016-2020), there are 5 manganese ore energy resource bases in China, east-xiangxi, southwest Gui, Xinjiang Aktau-Ucha, Hunan Yongzhou, southeastern Mongolia-Shanshan-Chubei; Key survey area 11, Liaoning Lingyuan City Taipinggou - Tile House, Guangxi Tianyuan - Deponavon, Hunan Huayu, Shichuan Changyang, Chongqing City Mouth, Xiushan, Guizhou Copper Rensong Peach, Zunyi, Changxing - Wanshan, Xinjiang Pozgor, Southwest Tianshan Malkantu-Muhu; It is planned to add 900 million tons of manganese ore to the identified reserves between 2016 and 2020.

As a large steel country, China's manganese ore consumption is huge. According to the U.S. Geological Survey, China's manganese ore production in 2016 3 million tons, domestic production is far from meeting domestic demand, manganese ore mainly rely on imports. According to the General Administration of Customs, China's manganese ore imports in 2016 totaled 1705.04 million tons, an increase of 8.21% year-on-year. South Africa is the leading source of manganese ore imports from China, with 709.19 million tons of imports in 2016, involving $788 million in gold. Other major sources of imports include Australia, Ghana, Brazil, Gabon, Malaysia and so on.

  China's manganese ore imports and year-on-year situation (tons)

  


  Source: Public information collation

  Sources of imported manganese ore

  


  Source: Public information collation

In 2016, China's imported manganese ore consumption was 16.0551 million tons, compared with 17.0534 million tons in the same period, with an excess of about 1 million tons of imported manganese ore. In January-July 2017, imports of manganese ore consumed 11.630 million tons, imports amounted to 12.568 million tons, and the surplus was nearly 900,000 tons. This year's import volume is greater than consumption mainly occurred in January and February, March-July imports total less than the total consumption of the same period, imported manganese ore consumption of 933.00 million tons, import volume of 890.70 million tons, bringing down port inventory.

  Imports of manganese ore and consumption of imported manganese ore (tons)

  


  Source: Public information collation

In 2016, China's manganese port inventory decreased significantly, with an average annual stock of 1.8517 million tons, down 34.20% from 2015. Port inventories are concentrated at Tianjin and Qinzhou ports, with an average annual inventory of 1.4943 and 328.1 million tons in 2016. In the first three months of this year, inventories at manganese ports grew at a faster pace, peaking at 3.6611 million tonnes in mid-March, before falling back. As of September 22, China's manganese port inventory fell to 2.2549 million tons, the lowest level this year. Comparing the current level of consumption of imported manganese ore, the port inventory of manganese ore can be used by the production enterprise for more than 1 month without considering the standing stock of imported manganese ore in the production enterprise's factory

  Manganese port inventory (tons, yuan/MTU)

  


  Source: Public information collation

   Silicon manganese and square billet tax-bearing price (RMB/tonne)

  


  Source: Public information collation



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