China Silicomanganese Prices Strengthen in Late August on Higher Feedstock Costs and Firmer Steel Tenders

China's silicomanganese market transitioned from July's weakness into a firmer posture by late August 2026, with prices posting consecutive weekly gains driven by rising feedstock costs and improved steel mill tender sentiment.

Upstream cost pressures provided the primary support for silicomanganese prices. Chemical coke prices rose twice during the month, while manganese ore traders—having faced significant losses—became increasingly reluctant to sell at lower prices, collectively lifting quotes as market sentiment shifted from earlier pessimism. However, high port inventories of manganese ore—standing at 5.84 million tonnes as of early August—continued to weigh on the broader cost structure. The national operating rate for silicomanganese producers remained low at approximately 32-33%, with average daily output of around 24,000-24,600 tonnes.

Demand dynamics showed marginal improvement. Steel mills progressed with their August tendering process, with tender prices rising and supporting silicomanganese market sentiment. Downstream steel demand is gradually moving toward the traditional peak season, though mills remain focused on immediate requirements and show limited willingness to chase higher prices. Steel mill profitability remains under pressure, with only 34% of surveyed mills reporting positive margins.

Supply-side constraints provided additional support. Persistent losses across production regions have kept operating rates low, with some plants hesitating to restart despite improved margins.

Looking back at July 2026, the silicomanganese market recorded a 3.02% month-on-month decline as downstream buying remained muted through the traditional off-season. Early July saw downward pressure amid rising domestic output and subdued finished-steel demand, while mid-to-late July activity featured selective restocking and intermittent producer resistance to further cuts as feedstock and power costs stayed elevated.

Looking ahead, silicomanganese prices are expected to remain firm with a slight upward bias in the near term, supported by higher ore costs and firmer steel mill tenders. However, high inventories and potential production resumption—as some plants consider restarting with improved margins—may limit the upside. The market's direction will hinge on whether seasonal demand recovery materializes and whether cost support can withstand persistent inventory pressure.