Chinese selenium prices have risen sharply in the past few weeks, as suppliers raised their offer prices to keep pace with higher crude selenium feedstock costs.
Prices for 99pc grade dioxide began to rise on 24 February when prices were assessed at 59-62 yuan/kg ($9-9.50/kg) del China consumer, increasing by 28pc to Yn75-80/kg yesterday.
Copper producers, the main suppliers of crude selenium feedstock, have raised their offer prices and scaled back sales to push up prices. A copper producer in south China has increased crude selenium prices to Yn68/kg this week, up by around Yn5/kg from last month. Other copper producers have opted to withhold sales of their inventories.
The rise in feedstock costs has in turn prompted some dioxide producers to offer as high as Yn85-88/kg today, with even higher offers in the short term.
The higher crude selenium prices also lifted prices for 99.9pc grade powder yesterday by 10.64pc to Yn120-140/kg del China consumer from Yn105-130/kg on 11 March.
But a potential surplus of crude selenium supplies and an expected fall in selenium demand from the downstream manganese industry may slow down the uptrend, according to market participants.
China's refinery copper output increased by 2.5pc from a year earlier to 10.03mn t in 2020, data from the country's national bureau of statistics show. Domestic copper output is expected to maintain a mild increase this year following a recovery from the Covid-19 pandemic, which may add to ample supplies of crude selenium, a by-product of copper.
Major manganese producers, including China's largest smelter Ningxia Tianyuan and Guizhou Wuling, Citic Dameng and Guizhou Sanhe, may suspend output for 10 days from 20 March following a meeting on 15 March among key producers in the manganese industry alliance, led by Tianyuan, to prevent prices from falling further. This prompted most manganese producers to halt offers yesterday on expectations of higher prices in the near future.
The range for 99.9pc grade manganese flake dropped to Yn15,700-15,900/t ex-works on 15 March, down by Yn300/t in the past two weeks. But prices have rebounded to Yn15,800-16,000/t today following the manganese smelters' suspension plans.
Selenium dioxide demand from most manganese smelters is expected to weaken if they suspend their output. Only Ningxia Tianyuan has in-house selenium dioxide production in China.
There has been limited activity in the selenium market this week as many buyers were reluctant to accept the sharp rise in prices. The lower activity is also expected to slow down the uptrend in the short term, said market participants.
