ORES & ALLOYS BLOG: Unexpected price uptick raises prospect of manganese ore squeeze, new arbitrage

A sudden upturn in manganese ore offer prices in Chinese ports at the start of the week has caught out market participants who had resigned themselves to another crash.

It has also heightened longstanding speculation that traders are planning another inventory squeeze in Chinese ports and using the gap between seaborne and port prices as an arbitrage to earn large profits.
Manganese ore prices have been stuck in a protracted cycle of rallying and crashing for years. The factors driving this trend have included oversupply, logistics disruptions and trader activity in China.
“Traders are working on it again,” a source at a manganese ore miner told Metal Bulletin. 
Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth dropped to 2 cents to $3.86 per dmtu on Friday April 21, equivalent to about $4.42 per dmtu on a cif basis.
Metal Bulletin’s 44% manganese ore index, cif Tianjin dropped 5 cents to $5.13 per dmtu.

By Monday, end-users bids and transacted prices for 37% material had dropped...

Published

Janie Davies

April 27, 2017

14:29 GMT

London

Keywords