GLOBAL MANGANESE WRAP: Low-grade ore prices into China lose recent gains

Prices in China for imports of 37% manganese ore fell over the week ended Friday February 22, with some buyers resisting recent rises in offer prices.

  • Low-grade ore price falls
  • High-grade ore price ticks upward
  • US prices of FeMn 78% and SiMn edge upward
  • SiMn price in China falls
  • Alloy prices stable in Europe and India.

Fastmarkets’ index price for 37% manganese ore, cif Tianjin, fell by $0.13 per dry metric tonne unit (dmtu) to $5.97 per dmtu on February 22.

Deals for semi-carbonate manganese ore were reported at lower offer prices than in the previous week. Prices dipped amid resistance from Chinese buyers to some of the higher prices that had been accepted after the Lunar New Year holiday on February 4-10.

“[A price of] $6.00 per dmtu for semi-carbonate materials seems to be reasonable in the spot market at the moment. I don’t think Chinese buyers would buy above this level,” a Chinese trader said.

One producer described the market as relatively stable, and reported good demand from large manganese alloy smelters. “I am seeing a lot of inquiries from large plants,” the source said.

The fob price dropped further in response to a rapid increase in the cost of freight. The fob index is calculated using the cif price when no fob data is available.

Fastmarkets’ 37% manganese ore index, fob Port Elizabeth, dropped by $0.18 per dmtu on February 22 to $5.36 per dmtu

“It makes sense that fob prices have gone down because freight rates have increased to $22 per tonne from [as low as] $18 per tonne,” the Chinese trader source added.

Meanwhile, the price of high-grade material was almost unchanged. Fastmarkets’ 44% manganese ore index, cif Tianjin, was $6.54 per dmtu on Friday, up by $0.01 per dmtu from the previous week.

The South African rand had a volatile week but a market source pointed out that margins for manganese ore miners were large enough that such movements need not affect their offer prices.

But although higher production costs as a result of an increase in the rand could be absorbed by producers, this was not necessarily the case for traders. “Producers can cope with the rand movement but it is a different story for the traders – it can wipe out all their profits,” a producer said.

Looking forward, new silico-manganese projects expected to come on stream in March-May could give short-term support to manganese ores prices but the effect could also be short-lived, a trader said.

“Rising demand from silico-manganese refineries might underpin manganese ores prices in the short term, but eventually [the potential fall in] alloy prices will create headwinds for ore prices,” he said.

Domestic Chinese ore prices tick up
Domestic Chinese spot manganese ore prices at major ports continued to show small gains following restocking activity among consumers.

Fastmarkets’ manganese ore port index for 37% material, fot Tianjin, rose to 50.70 yuan ($7.56) per dmtu on February 22, from 50.50 yuan per dmtu.

The corresponding manganese ore port index for 44% material, fot Tianjin, rose to 57.90 yuan per dmtu on February 22, from 57.60 yuan per dmtu in the previous week.

Due to the active buying of port materials, manganese ore inventories at the main Chinese ports of Tianjin and Qinzhou dropped quickly over the past week. Stocks fell to 2.67-2.99 million tonnes on February 20 from 3.00-3.14 million tonnes one week earlier, according to Fastmarkets’ assessment.

Silico-manganese alloys in China
The price of domestic Chinese silico-manganese alloys trended downward last week on poor demand in combination with a bearish outlook.

Fastmarkets’ price assessment for spot domestic Chinese silico-manganese dropped to 7,200-7,400 yuan ($1,073-1,103) per tonne on February 22, from 7,300-7,500 yuan per tonne a week before.

“The consumption outlook for steel products is not clear, given the heavy rainfall in southern China, which might delay the post-holiday resumption of operations for the downstream steel industries,” a Chinese consumer said. “Therefore, steel mills will hesitate to commit to large procurements.”

Prices fell despite news of a potential power shortage in Inner Mongolia in April and May, when silico-manganese alloy refineries might be forced to reduce their production.

“Even if there is a [silico-manganese alloy] production fall due to power supply shortages, it would only last a short while,” a third Chinese trader said.

Indian silico-manganese unchanged
Fastmarkets’ price assessment for silico-manganese, fob India, min 65% Mn, was stable at $1,010-1,030 for the fifth consecutive week.

Although the market has been steady for a while, producers said that the recent increase in ore prices had not been felt in the Indian alloy market yet. Even including the fall this week, the fob South Africa index for 37% manganese ore has risen by 7.5% since January 18 this year.

“We have not done any business at higher prices but we have received higher offers,” a producer said.

The European manganese alloy market was stable, with sellers hoping that demand will revive in March.

Fastmarkets’ price for ferro-manganese, 78% Mn, delivered in Europe, was unchanged at €1,030-1,060 ($1,167-1,201) per tonne on February 22, while the price for silico-manganese, 65-75% Mn, was steady at €980-1,130 per tonne on the same day.

“The market will be looking to buy again in March. I expect there will be a jump in prices for alloys at that time,” one market participant said.

US SiMn prices firm in more active spot market
The high-carbon ferro-manganese price in the United States edged upward last week, with suppliers able to achieve higher prices on small-tonnage transactions.

US spot prices for high-carbon ferro-manganese widened upward to $1,300-1,370 per long ton on February 21, up from $1,300-1,350 per long ton previously, according to Fastmarkets’ latest assessment.

Trading activity was relatively slow over the period, but suppliers were able to get higher prices despite the limited spot-market demand.

“We’ve been looking to test the market for a couple weeks and we are now having success at the upper end of the range,” a supplier source said.

Some market participants suggested that tighter regional supply may be supporting prices at current levels.

Meanwhile, the US silico-manganese market became firmer at $0.63-0.64 per lb on February 21, up from $0.62-0.64 per lb previously, according to Fastmarkets’ latest assessment.

The spot market has seen a noticeable uptick in volumes over the past few weeks, with both mills and traders seeking to procure material.

“We’ve seen an unusual amount of spot inquiries in the past couple of weeks. We typically don’t see big prompt volumes around this time,” a supplier source said.

“Both mills and traders have come to us looking for material. It seems to us like there has been some material displacement because of shipping delays, resulting from the cold weather,” a second supplier source said.

While spot demand has been more plentiful, suppliers have been able to get firmer prices on these large-volume sales.

Market participants suspected that prices would remain firm over the near term while supplies remained relatively tight.

Global manganese market prices

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Janie Davies

Chris Kavanagh

Susan Zou

Jon Stibbs


Janie Davies

Chris Kavanagh

Susan Zou

Jon Stibbs

February 25, 2019

20:32 GMT

London, Shanghai, New York