HBIS Silico-Manganese Tender Prices Fall as China Steel Demand Weakens

Silico-Manganese

HBIS silico-manganese tender prices fell in April as weaker steel demand and higher spot alloy availability pressured China’s bulk alloy market. Hebei Iron and Steel cut its tender price for 65/17 grade silico-manganese to 6,300 yuan/t delivered and paid by acceptance bill.

The latest HBIS silico-manganese tender prices were down by 250 yuan/t from the previous tender. The state-owned steel producer increased April purchase volumes to 8,500t, up by 3,400t from its previous buying round.

HBIS silico-manganese tender prices are closely watched because they help set the tone for China’s manganese alloy market. The lower tender confirms that steel mills are using weak downstream demand and larger spot availability to push procurement costs lower.

The cut also reflects pressure from rising steel inventories. China Iron and Steel Association members held 18.63mn t of steel inventories as of 20 April, up 6.4% from early April and 12% from a year earlier.

Oversupply Weighs on Alloy Prices Despite Higher Tender Volumes

China’s domestic 65/17 silico-manganese alloy prices fell to 6,000-6,150 yuan/t ex-works on 23 April. This was down from 6,100-6,300 yuan/t on 9 April.

The price decline reflects continued oversupply in the market. Higher inventory pressure has limited the ability of alloy producers to defend prices, even when some steel demand shows signs of recovery.

HBIS’ higher purchase volumes gave the market some support, but not enough to reverse price direction. Buyers remain cautious because steel inventories are still elevated and construction demand has not yet fully recovered.

Some market participants are more optimistic about the steel outlook. Construction and infrastructure demand are expected to resume gradually, while domestic and seaborne steel demand improved in mid-April.

Chinese steel mills also lifted production slightly during that period. If steel output continues to rise, silico-manganese consumption could improve because the alloy is widely used in steel deoxidation and strengthening.

However, the recovery remains uneven. The higher HBIS buying volume suggests some restocking need, but the lower price shows that mills still hold negotiating power.

Ore Costs and Output Curbs Limit Downside Pressure

Many silico-manganese plants kept firm offers despite weaker spot prices. Higher manganese ore feedstock costs continue to support producer cost floors.

Output curbs at several large alloy producers in north China also helped limit deeper declines. Reduced production can help balance supply if demand recovers, but current inventory pressure remains the larger problem.

The market is therefore caught between two opposing forces. Weak steel demand and alloy oversupply are pushing prices lower, while ore costs and production curbs are preventing a sharper collapse.

This tension is typical of bulk alloy markets. Producers cannot easily cut prices below cost for long, but buyers can delay purchases when inventories are high and demand is uncertain.

For steelmakers, lower silico-manganese tender prices provide some cost relief. For alloy producers, the main challenge is preserving margins while feedstock prices remain firm.

The next market signal will come from whether steel demand improves enough to absorb alloy inventories. Without clearer consumption growth, manganese alloy prices may remain under pressure even if ore costs stay elevated.

The Metalnomist Commentary

HBIS’ tender cut shows that China’s silico-manganese market is still demand-led, despite higher ore costs. A real recovery will require stronger steel consumption and inventory drawdowns, not only higher tender volumes.