Hubei Letong Halts Manganese Flake Production Due to Losses

Hubei Letong, a Chinese manganese flake producer, suspended its output last week amid operating losses and equipment maintenance issues, market sources confirmed. The company, based in Changyang county, Hubei province, has yet to announce when production will resume. Hubei Letong was producing 40-50 tonnes per day prior to the halt, with a total annual capacity of 36,000 tonnes. Compounding the situation, manganese ore supplies have been tight due to local environmental inspections.

Manganese flake prices have rebounded slightly in the past two weeks, driven by producers raising offers to offset operating losses. However, further price increases are not expected, as the market for manganese alloys has remained sluggish. The stainless steel sector, a major consumer of manganese flake, has not recovered as anticipated, even after the typical summer slowdown ended.

Producers with in-house mines faced significant losses when prices fell below 12,000 yuan per tonne. On September 18, domestic prices for 99.7% grade manganese flake were assessed at 12,000-12,200 yuan per tonne, reflecting a 300-yuan increase from earlier this month. This price recovery comes after a downward trend throughout July and August, following a one-year high of 13,700-13,900 yuan per tonne in late June.

Hubei Letong Resumes Manganese Flake Production Amid Price Surge

Chinese manganese flake

In a move reflecting optimism in the metals market, Hubei Letong, a prominent Chinese manganese flake producer, has resumed its production of 30-40 tons per day after a nearly month-long hiatus. The suspension, which began in mid-September, was primarily due to equipment maintenance and ongoing operating losses that necessitated the pause in operations.

Market Recovery Fuels Production Resumption

The resumption of output coincides with a notable increase in manganese flake prices, driven by rising demand from the stainless steel sector. As of October 14, domestic prices for 99.7% grade manganese flake were assessed between 12,300 and 12,500 yuan per ton (approximately $1,737 to $1,765), marking a rise of 100 yuan per ton from October 11. This increase is a significant recovery from the earlier price range of 12,000 to 12,200 yuan per ton reported on September 25.

The market sentiment has strengthened in the latter part of September, particularly following China’s announcement of new stimulus measures aimed at bolstering the struggling real estate sector ahead of the October national holiday. Industry observers remain cautious, however, as they anticipate whether these policies will sufficiently stimulate demand within the steel sector.

Jingxi Daxinan Halts Manganese Flake Production Amid Market Pressures

Manganese Flake

Maintenance Shutdown Precedes Lunar New Year Holiday

Jingxi Daxinan, a Chinese manganese flake producer, will halt its daily output of 30-40 tonnes next week. This stoppage is for equipment maintenance prior to the Lunar New Year holiday. The company plans to restart production mid-February. Located in Jingxi city, Guangxi province, the smelter boasts a 20,000 tonne annual capacity.

Market Stability and Producer Challenges

Manganese flake prices have remained stable since December 12, 2024. This follows an earlier price surge. Stainless steelmakers resist higher offers. They cite rising manganese alloy prices, a substitute material. Some smaller producers struggle with profitability. They lack in-house mines or power plants. Low demand from stainless steel sectors hinders price increases. Several producers are halting operations for maintenance. This happens before the Lunar New Year holiday. Hubei Letong and Tongren Hecheng also stopped production. Domestic 99.7pc grade flake prices are at 12,300-12,500 yuan/tonne. Prices should remain steady. Producers will hold firm. Rising sulphuric acid and ferro-alloy prices support flake prices. This offsets low stainless steel demand.