I. The overall SiMn alloy market currently shows a pattern of holding up well, with both spot and futures markets trending upward. Compared to Q4 2025, market trading activity has improved, and various production regions exhibit differentiated competitive landscapes.
Inner Mongolia: Significant Comprehensive Cost Advantages and Diversified Sales Channels
As the core production region with the largest SiMn alloy capacity nationwide, Inner Mongolia holds prominent competitive advantages, maintaining high production enthusiasm throughout the year. In terms of freight, proximity to Tianjin Port results in lower raw material transportation costs compared to other regions. Regarding electricity prices, the increased proportion of green electricity usage has widened the cost gap with southern production regions, giving it a strong production edge. In sales models, most factories in Inner Mongolia primarily supply steel mills, but in recent years, with increased participation in the futures market, opportunities to lock in profits through futures hedging have grown, expanding producers' sales channels and enabling stable operations.
Ningxia: Gradual Emergence of Cost Advantages, Inventory Pressure Awaits Release
The cost of SiMn alloy in the Ningxia production region falls in the middle tier, higher than Inner Mongolia but lower than southern regions. In terms of electricity prices, Ningxia benefits from policies related to spot electricity trading; its monthly settlement prices in 2025 showed a significantly greater advantage over 2024, even dipping below those of Inner Mongolia in some months. Sales channels are mainly trader distribution and futures pricing. Affected by the previous weakness in futures, factory shipment speeds slowed down, leading to inventory accumulation issues. Currently, producers maintain stable operations.
Southern Production Regions: Prominent Cost Pressure, Operating Rate Remains Low
Costs are much higher than in the north, resulting in severe losses for SiMn production and considerable operational pressure. In 2025, some factories reduced or halted production or switched to producing FeMn alloy. The number of remaining producers is relatively small, and many engage in off-peak production to control costs, keeping the operating rate consistently low. Large producers mainly supply steel mills directly to secure basic orders; smaller producers rely on trader channels for sales and are more sensitive to market price fluctuations.
II. 2026 SiMn Alloy Market Outlook
1. Cost Side: Overall Increase with Significant Regional Divergence
The manganese ore market, influenced by both tight supply and demand support, is likely to fluctuate upward; coke prices are also expected to rise, together providing rigid support for alloy prices. Regarding electricity costs, regional disparities continue to widen: Inner Mongolia and Ningxia are expected to see relatively small fluctuations in electricity prices, maintaining relatively low levels throughout the year and solidifying their cost advantages. In southern production regions such as Guangxi and Guizhou, the extent of electricity fee preferential policies remains unclear, with expectations of potential increases, necessitating close attention to subsequent policy implementation. Overall, the central cost of SiMn alloy production in 2026 is likely to shift upward. Northern key production regions like Inner Mongolia, leveraging their cost barriers, may further strengthen their control over the market.
2. Supply Side: Capacity Concentration in the North and Deepening Industry Consolidation
2025 was originally a period for the concentrated start of production for newly applied capacity. However, due to market conditions and power supply constraints, most of the new capacity failed to commence operations as scheduled and was delayed. In 2026, the main new capacity is concentrated in the Inner Mongolia region. If the new capacity in Inner Mongolia starts production on time, the structure of the SiMn industry may undergo adjustments. The commissioning of new capacity will accelerate the exit of small and medium-scale capacity from the market, thereby further deepening the consolidation of the SiMn industry. The disparity in capacity distribution, characterized by higher levels in the north and lower levels in the south, will become more pronounced.
3. Demand Side: Structural Benefits Emerge, Release Pace Awaits Verification
In 2026, the demand side for SiMn alloy is expected to see support from multiple structural benefits, opening up incremental space for industry demand. However, the actual extent of release still needs to be verified based on project progress and actual market conditions. Firstly, the Yajiang Project officially commenced in July 2025. As a large-scale infrastructure project spanning ten years, it will indirectly boost the demand for SiMn alloy and may form a demand support. Secondly, the "going global" strategy for SiMn alloy may be further emphasized. Leveraging the demand from overseas infrastructure and the development of the steel industry, it is expected to explore new incremental markets abroad, injecting new growth momentum into the demand side. Close attention should be paid to the pace of overseas market expansion and the progress of domestic project construction to assess the actual strength of demand release.
Overall: Tug-of-War Between Sellers and Buyers Intensifies, Fluctuating Operations Become the Main Theme.
In 2026, with capacity release on the supply side for SiMn and the pace of demand release yet to be verified, there is a downside risk for SiMn alloy prices. However, the firm trend in prices of manganese ore and coke on the cost side will form strong support at the price bottom. Coupled with the implementation of steady growth plans for the steel industry on the policy front, this is expected to effectively curb the deep decline space for SiMn alloy prices.It is anticipated that the market price of SiMn alloy will maintain a fluctuating trend within a reasonable range in 2026, with the price fluctuation amplitude significantly influenced by marginal changes on both the supply and demand sides.
