Low-grade manganese ore prices continued to rise on Friday
March 17 after the flurry of demand that started last week
Metal Bulletin’s 37% manganese ore index
, fob Port
Elizabeth, rose 19 cents to $2.42 per dmtu, equivalent to $3.17
per dmtu cif.
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Sources agreed there was little or no low-grade manganese ore
business transacted below $3.10.
The increase was largely driven by buyers who came into the
market with high bid prices.
Some buyers continued the trend of "averaging out" the purchase
prices of their ample stocks. This involves buying more
material at recent low prices to offset the high prices paid
for most of their existing stock at the height of the 2016
"There are about 3.6 million tonnes of manganese ore in Chinese
ports but the bulk of [this material] was bought in November
and December at $8.50. Those holding it are trying to blend
away some of their high price stock," a source at a manganese
ore miner told Metal Bulletin.
Rising silico-manganese futures prices have also helped to
support manganese ore prices as market participants anticipate
improved ore demand and higher prices further out.
"Futures prices are pulling the physical market up, but it will
be short-lived given the stock situation," a market source told
"People are comfortable booking low-grade at either side of
$3.00 when silico-manganese prices are running, because they
don’t see significant downside at that level. But
we will see stocks continue to increase at this price and the
fundamental oversupply will be exacerbated," the source added.
Metal Bulletin’s high-grade manganese ore index,
cif Tianjin, dropped 2 cents to $4.02 per dmtu after a large
volume of material was sold slightly below last
week’s index price.
While activity has been limited, market participants
experienced difficulty in attempting to acquire high-grade
ore at low prices, as prices for the material have shown signs
Chinese alloy prices rise
The rise in low-grade ore prices has matched that of the rise
in prices for spot silico-manganese
, as well as its
Chinese silico-manganese spot prices rose to 6,500-6,800 yuan
per tonne March 17, up 18.8% from 5,400-5,800 yuan per tonne
Market participants are reportedly playing the futures markets,
which has helped to drive up prices for the material.
"The silico-manganese futures market is very active now. Also
its volume is rising, so its influence on the spot market or
even the manganese ore market is expanding," a trader in
However, some suggest speculation by outside investors is
behind the rapid rise in pricing for silico-manganese on the
"I think silico-manganese futures have gained because of
speculation by investors. When you see that most ferrous
futures prices have been rising recently, and consider that
silico-manganese prices look low but the material is used as a
raw material in steel making, then the price rises suggest it
has attracted investors’ attention," a Tianjin
Smelters this week also continued lifting their offer
prices because of the pressure on them of high
manganese ore costs, as well as the rise in futures prices.
"I've heard now that it's difficult to buy cargo from smelters
as most of them are not willing to do business. They are hoping
for prices to rise further as their manganese ore costs
are high," a third trader told Metal Bulletin.
Chinese spot prices for high carbon ferro-manganese also
increased to 5,500-5,700 yuan per tonne on March 17, up 4.7%
from 5,200-5,500 yuan per tonne previously.
Meanwhile, silico-manganese prices in India jumped towards the
end of last week, as expectations of a potential strengthening
in ore prices lifted sentiment.
"All manganese-related products have shot up today. Suddenly,
quotes have risen by 4-5 rupees per kg," one Indian source told
Metal Bulletin on Friday March 17.
Prices leapt to $945-985 per tonne on a fob India basis, up
from $920-960 fob India a week earlier.
"The Indian market is very quick to react to a change in
sentiment on ore," a European source said.
European prices rise on tightness
Silico-manganese in Europe was, meanwhile, boosted slightly by
the tight availability of spot material.
Prices inched up at the top end to €1,000-1,120 per
tonne on March 17, up 1% from €1,000-1,100 a week before.
"Some mills require prompt shipments within a few weeks. Cheap
Indian material cannot reach Europe so rapidly, so
that’s where there are some higher numbers
around," a trader said.
Some buyers have had to pay more in order to secure material
promptly, but availability looks set to loosen.
Ferro-manganese prices found even more strength in Europe last
week, up €50 euros on the low end to €1,200-1,275 per
tonne delivered for 78% manganese and 7.5% carbon.
But similarly to silico-manganese, the availability of material
for prompt delivery has tightened in recent weeks, with limited
numbers of sellers offering cargoes.
"There’s been a bit of an uptake on European
ferro-manganese," a European trader said to Metal Bulletin.
"We have limited spot material available," a producer said,
adding he had heard indications as high as €1,295 for
spot delivery. However, he had seen significantly lower
indications for forward delivery.
"There’s some pressure on the Q2 prices. Talk is
around €1,000-1,020 for Q2," he added.
Some market participants similarly expect that more material
will hit the spot market in the next few weeks from India and
elsewhere, potentially pushing prices downward.
US alloy markets remain static
US manganese alloy prices have largely held flat as
spot market activity has stalled, while the remaining
second-quarter negotiations are finalised.
US spot prices for high carbon ferro-manganese remained
unchanged at $1,400-$1,475 per gross ton on March 16, according
to Metal Bulletin sister publication AMM’s latest
Despite the outside pressure from the previously falling ore
prices and lower alloy prices overseas, market tightness has
helped to keep prices firm.
"A mill came to us for more material for second-quarter
delivery, but we had to decline the offer," a supplier source
told AMM. "We are tight, and we just don’t have
any more material to offer at this point outside of our current
Market participants had been waiting for the return of the US
Defense Logistics Agency Strategic Materials (DLA), in
anticipation that a potential sale would relieve some of the
tightness in the US market.
This came to fruition last week as the DLA announced that it
will hold a sale
on March 21 for 15,000 short
tons of high carbon ferro-manganese.
It is suspected that this may help alleviate supply-side
concerns, potentially driving prices downward.
US silico-manganese prices slipped slightly to 65-68 cents per
lb on Thursday March 16, down 1 cent on the low end from 66-68
cents per lb previously.
While the market has been affected by the threat of
cheaper inbound material, the recent reversal in low-grade ore
and silico-manganese sentiment overseas may help to soften the
"It will be interesting to see how the market reacts here
following the rebound in Chinese prices as well as ore prices
this past week," a silico-manganese supplier source told AMM.
"The market had been expected to crash downward in time, but
this reversal may prevent the expected precipitous fall."