COMMENT: Five queries answered about Metal Bulletin’s manganese ore indexes

Metal Bulletin is taking part in a large number of discussions with market participants about the manganese ore indexes that we launched last year – one for 44% Mn ore cif Tianjin, and the other for 38% Mn ore fob Port Elizabeth.

By
Metal Bulletin is taking part in a large number of discussions with market participants about the manganese ore indexes that we launched last year – one for 44% Mn ore cif Tianjin, and the other for 38% Mn ore fob Port Elizabeth.

So, in the run-up to the International Manganese Institute (IMnI’s) 39th annual conference in Istanbul on June 4, what better time to review some of the topics that come up?

What are the information sources for Metal Bulletin’s index prices for 44% Mn ore cif Tianjin and 38% Mn ore fob Port Elizabeth?
Our teams in London and Shanghai canvass ore producers, traders and consumers to gather details of transactions, as well as bids, offers and assessments. The indexes, which are published every Friday afternoon London time, are not based on the figures from any one producer or consumer. Metal Bulletin is independent and seeks wide contributions to its prices. It has no interest in the direction in which prices move.
We created the price specifications in order to represent the most liquid grades and locations for a range of materials from global producers — a 44% price, settled on a cif Tianjin, China basis; and a 38% price on a fob Port Elizabeth, South Africa basis. We are considering launching a 38% price on a cif basis for other locations to give smelters outside of China a range of references.

How many companies do you usually contact?
For each weekly index price, Metal Bulletin generally has 15-25 data points. So far, about 45 companies have contributed to the index price discovery process, though clearly it is not the same number each week. We welcome wide participation in the price discovery process, which is not confined to a selected group.

Why are traders included?
In China, manganese ore is traded by companies with close links to the large smelters that consume it. The analysis that Metal Bulletin has carried out on the numbers contributed by traders shows that, rounded to two decimal places, the trader sub-index has on average been the same as the overall index since it was launched last November.

Still, they only play a small role
These companies take positions on manganese ore price and are an integral part of the market, to which they provide liquidity. If the whole index was weighted towards those buying or selling the largest volumes, for example, big producers would have a far greater weight than any other participant since manganese ore supply is more consolidated than ore demand. The index’s separation of prices from producers, traders and consumers ensures that different parts of the supply chain have equal weighting.

How do you guarantee we can trust your index? How accurate are these figures?
We have been assessing prices for Mn ore since the 1940s. Feedback since we launched the indexes suggests the prices represent those seen in the market. Metal Bulletin is a 100-year-old publisher, owned by Euromoney Insitutional Investor, which is listed on the London Stock Exchange.

If you have further questions, please contact Alex Harrison, aharrison@metalbulletin.com

Alex Harrison 
aharrison@metalbulletin.com
Twitter: @alexharrison_mb 

Recent Base Metals News

Editor's pick