Judging from the situation of manganese and silicon, the supply of manganese ore decreased significantly in April. Although the current supply and demand of manganese and silicon have both increased, the future output is expected to decrease due to policy influences.

The main cost of manganese silicon lies in manganese ore. From January to April 2021, my country's manganese ore imports amounted to 10.46 million tons, an increase of 15.7% year-on-year, and the rate of increase has decreased. Among them, manganese ore imports in April were 2.247 million tons, higher than the same period in 2020, but lower than the same period in 2019. The main reason is that the import profit of manganese ore has turned negative after February 2021. The import volume of manganese ore in April is expected to remain low, and the import volume in May is also expected to be low. In April 2021, the cumulative output of manganese and silicon nationwide was 911,000 tons, an increase of 2.11% month-on-month and an increase of 10.2% year-on-year. The production growth of silicon manganese in April was still relatively fast, mainly because the profit in March and April was better. The limited production in some areas of Inner Mongolia had less impact on silicon manganese than ferrosilicon. Judging from the short-term manganese silicon data, the operating rate of manganese silicon has risen slowly from 60% to about 65%. The current policy has two impacts on manganese silicon output: one is the direct curtailment of electricity, which leads to a reduction in production; the other is the electricity tariff policy, where Inner Mongolia will increase electricity tariffs for restricted production capacity. The production capacity of manganese silicon is expected to be 574,100 tons, which directly increases the production cost line of manganese silicon. After May, the profit of manganese in the north has declined to a certain extent, and the profit in the south has rebounded slightly.

From the perspective of demand, the demand for manganese and silicon is still improving. Manganese silicon is used for crude steel, and the amount of rebar is relatively large. From January to April, the cumulative production of rebar in my country reached 87.02 million tons, a year-on-year increase of 16.9%.

Looking ahead, it is possible that ferroalloy futures will shift from a double increase in supply and demand to an increase in supply and demand. As Ningxia and other places will increase production in 2021, the market expects that the policy will continue to limit production in the future. In addition, in Inner Mongolia and some areas in the south, the production limit policy for ferroalloys has not been relaxed, and the probability of future production of ferroalloys will continue to increase. On the demand side, the control of crude steel production will continue, and the long-term goal of carbon peaking and carbon neutrality has not changed. However, it is expected that the policy target of crude steel production control in the short term, namely 2021, will be relaxed. The growth rate of crude steel production is expected to exceed the growth rate of ferroalloy production in the future, so the trend of ferroalloy is still optimistic.