Summary of supply demand situation in the third quarter (July to September) of 2011 indicates that the power supply restriction forced crude steel production to drop, making consumption of manganese ferroalloys also drop.

Crude steel production in China during the quarter was 18.060 million tonnes, substantially down by 34% YoY from 27.357 million tonnes in the same 3 month period of 2010, and also largely down by 31.5% QoQ from the preceding quarter (April to June 2011). As to the crude steel production by the electric furnaces, included in the crude steel production, output in the Q3 of 2011 was 3.796 million tonnes, down by 34.7% from 5.809 tonnes in the same quarter of 2010.

However this big curtailment in the Q3 was foreseeable to some extent, as the summer power supply restriction plan was in sight already in the second quarter and due to that plan most of the steel producers took preparatory measures by increasing production in the preceding quarter, making the Q2 production higher by 5.8% compared to the Q1 of 2011. In a sense the low Q3 production was within a scope of assumption after the prepared high output in Q2.

Consumption of manganese ferroalloys during the Q3 was as follows:

High carbon ferromanganese: 106,013 tonnes, down by 7% YoY from 113,983 tonnes in the Q3 of 2010

Silicomanganese: 63,732 tonnes, down by 7.8% YoY from 69,185 tonnes in the Q3 of 2010

Medium and low carbon ferromanganese: 22,187 tonnes, down by 7.5% YoY from 23,985 tonnes in the Q3 of 2010

The imports, a sensitive antenna that reacts to steel mills' trend of consumption were:

High carbon ferromanganese: 20,688 tonnes, down by 41.9% YoY from 35,573 tonnes in the Q3 of 2010

Silicomanganese: 50,474 tonnes, down by 26.2% YoY from 68,634 tonnes in the Q3 of 2010

Medium and low carbon ferromanganese: 2,772 tonnes, up by 12.2% YoY from 2,470 tonnes in the Q3 of 2010

Production of crude steel during the nine months (January to September) of 2011 was 72.133 million tonnes, down by 12% YoY from 81.935 million tonnes in the Q3 of 2010.

(Sourced from TEX Report Limited)