Transalloys declares force majeure at manganese alloys plant

South African manganese alloys producer Transalloys has declared force majeure after a fire at its plant in the country on August 22 that severely impacted the raw material handling system feeding its five furnaces, it was revealed over the weekend.

No personnel were injured in the fire, the company said.
The precise length of the force majeure is unclear at this stage, with the restoration of full operation of the raw materials handling system expected to take about six weeks, according to an official from the sales agent that sells all of Transalloys’ output.
A force majeure event can either excuse a person or company from contractual duties entirely, allowing both parties to walk away and consider alternative options, or alternatively suspend their contractual obligations temporarily for the duration of the force majeure event.
Transalloys produces silico-manganese containing 65% manganese, 16% silicon, 2% carbon, 0.1% phosphorus and 0.15% sulfur.
"It will result in a significant production curtailment,” an official from Afrominerals Trading said in a statement emailed to Fastmarkets. "To mitigate the impact, alternative plans are being devised to reinstate part of the operation in September."
Transalloys’ force majeure follows its announcement in August that it is cutting its silico-manganese production by about 30% this year due to weakening market prices. The effect of Covid-19 lockdowns, high electricity tariffs and adverse market conditions has prompted Transalloys to adjust its silico-manganese production target for 2020 to 120,000 tonnes, from 170,000 tonnes.
Transalloys’ principal sales outlet for silico-manganese is the United States, followed by Europe. Much of the rest of its production is sold to Asia.
Silico-manganese is used in the making of long steel for the construction sector, such as rebar and wire mesh. It was likely to be under downward price pressure over the near term, while the pandemic took its toll on heavy industry and the commercial and housing sectors in the coming months.
Fastmarkets’ latest assessment of the price for silico-manganese, 65% Mn min, 16% Si, in-whs Pittsburgh was $0.49-0.51 per lb on August 27, unchanged from the week before. It was at a year-to-date high of $0.54-0.56 per lb from March 19 to May 21.
The corresponding assessment for silico-manganese, lumpy, 65-75% Mn, basis 15-19% Si (scale pro rata), major European destinations was €830-870 ($990-1,037) per tonne on August 28, unchanged from the week prior. The market was at a year-to-date high of €1,010-1,060 per tonne from April 17 to May 8, and is now at its lowest level since November 2019.

Declan Conway

declan.conway@fastmarkets.com

Published

Declan Conway

September 01, 2020

11:10 GMT

Galway