“More large furnaces have been built in recent years after alloy smelters made profits in the preceding few years,” Jian Zhou, chairman of Guangxi Guikang New Materials, told delegates during the conference, which is being held online.
“If they made money in one year and [achieved] huge profits in another year, they [had the momentum to] build more furnaces to enlarge their capacity in order to ensure that they would still be in the industry. This has caused the oversupply [in the manganese alloy sector],” he added.
Another panelist, Kevin Fowkes, managing consultant with AlloyConsult, cited strong demand from the steel sectors as one of the driving forces for oversupply of manganese alloys in China.
“The thing with silico-manganese in particular is that the demand has been rising quite strongly over the past couple of years, and that has been encouraging new capacity and new production,” Fowkes said.