PRICING NOTICE: Launch of two manganese ore price indexes

The Metal Bulletin Manganese Ore Indexes – High Grade (MBMnOI44) and MBMnOI38 – are two weekly reference prices for the manganese ore spot market.

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The Metal Bulletin Manganese Ore Indexes – High Grade (MBMnOI44) and MBMnOI38 – are two weekly reference prices for the manganese ore spot market.

They were launched on October 15, following weekly assessments that started in mid-June.

They are a tonnage-weighted calculation of actual transactions that have been normalised to a base specification (44% Mn and 38% Mn respectively) and delivery point and loading point (Tianjin and Port Elizabeth respectively), using the value-in-use for different materials applied by the market.

The Index is structurally designed to balance the influence of all sides of the market, preventing market distortions, and to remove incorrect or misreported data. All market data is combined into a single reference price, allowing maximum liquidity, and hence accuracy, in the model.

Metal Bulletin, through its journalists and analysts, provides weekly data from its widespread contact base of steel producers and manganese traders within China, and suppliers and traders outside China. This will be integrated into the model, making it the only Index with access to such data from major Chinese partners.

The indexes are based on actual transactions, which are reported to MB by any market participant who is conducting trades on a CIF Tianjin China spot basis and FOT Tianjin RMB basis or FOB Port Elizabeth basis. All origins of material are included, and normalisation curves are developed for different origins of material.

The data is normalised using an in-house developed model based on the value-in-use applied by the market to different material grades, to single manganese content (44%Mn and 38%Mn) and using the latest freight rates supplied by one of the leading brokers to the single ports of Tianjin and Port Elizabeth. The normalisation coefficients have been developed using MB’s historical data and history of reporting prices in this market, and updated every three months to reflect the value-in-use of different products and grades.

The details below are the base target specifications. Material that differs from the base specifications but falls within the target ranges are normalised to the base specification and port. The base specifications have been chosen in consultation with the market to accurately reflect the reality of the physical market.

MB has no financial interest in the level or direction of the index.

Wide industry participation in the indexes is welcome. To discuss taking part, contact Metal Bulletin editor Alex Harrison.

Accuracy
Three sub-indices are created for each index, based on data received from producers, traders and consumers. The sub-indices are based on a tonnage weighted calculation of actual transactions normalised for Manganese content and freight. The final index is the non-weighted average of the three sub-indices, allowing for equal representation from all sides of the market, and also counters market distortion or cherry-picking of data. Only the final index is published.

All data points that fall greater than 4% away from the calculated index are excluded, and the index recalculated once. Outliers will be investigated, and attempts to influence the index unfairly will result in the data provider being warned or excluded.

Data is submitted in a secure manner by phone, email, or directly through the website. All correspondence will be stored.

Notes
The normalisation coefficients are updated four times a year, with the new coefficients based on data collected over the previous three months. The Index will continue to be published on UK holidays. In the event of technical difficulties or other unforeseen problems, the index will be published from our Singapore office or Shanghai office, as appropriate.

Material in the form of pellets and fines is excluded. Domestic Chinese material and material imported by routes other than by sea, for example by train or truck, is also excluded from the 44% Mn cif Tianjin, China price.

Specification details for high-grade (44% Mn)
Manganese content: Base 44%, Range 42% to 48%
Iron content: Base 5%, Maximum 16%
Silica content: Base 4%, Maximum 12%
Phosphorous content: Base 0.10%, Maximum 0.16%
Alumina content: Base 6%, Maximum 12%
Moisture content: Base 4%, Maximum 12%
Others contents: (sulphur, calcium, magnesia)
Delivery: Port Tianjin (China)
Unit: measure US$ per dry metric tonne unit, CIF China
Granularity: 5.5mm-75mm
Form: Lumps
Publication: Weekly
Trade Size: 5,000mt
Payment method: Cash or equivalent
Delivery window: 6 weeks

Specification details for low-grade (38% Mn)
Manganese content: Base 38%, Range 37% to 39%
Iron content: Base 5%, Maximum 16%
Silica content: Base 6%, Maximum 12%
Phosphorous content: Base 0.04%, Maximum 0.16%
Alumina content: Base 1%, Maximum 8%
Moisture content: Base 4%, Maximum 12%
Others contents: (sulphur, calcium, magnesia)
Loading port: Port Elizabeth (South Africa)
Unit measure: US$ per dry metric tonne unit, fob Port Elizabeth, South Africa
Granularity: 5.5mm-75mm
Form: Lumps
Publication: Weekly
Trade Size: 5,000mt
Payment method: Cash or equivalent
Loading window: Within two weeks

Alex Harrison
aharrison@metalbulletin.com
Twitter: @alexharrison_mb

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