High-grade manganese ore prices plummeted to their lowest level in 17 months on Friday March 7, as suppliers cut offers further due to poor demand, high inventories and weak ferro-alloys and steel markets. 

Metal Bulletin’s 44% manganese ore index fell by 14 cents to $4.96 per dmtu, cif Tianjin, its lowest level since October 2012.  

Metal Bulletin’s 38% manganese ore index fell by 9 cents to $3.71 per dmtu, fob port Elizabeth, its lowest level since December 2013. 

This nets forward to about $4.49 per dmtu on a cif Tianjin basis.

“Alloys prices are too low; we cut our operating rate to 30% from 50% in January, and our ore inventory can still last two months,” a major smelter source from Guangxi told Metal Bulletin.

A trader in Europe agreed that it was only a matter of time before the weak alloys market would hit ore prices.

“The alloy price is getting absolutely smashed; of course it will affect ore prices,” the trader said.

Spot ore prices in Chinese ports have been falling for weeks, but large miners only started cutting their offers a week ago.

Still, some large miners have refused to negotiate on offers as they report strong demand outside China, especially in India.

Larger miners’ low-grade sales into India have been stable for several weeks at $4.65-4.70 per dmtu on a cif basis, several sources agreed.

Some added that there is little reason for them to sell at low levels into China when they can sell to India instead.

“Demand in China is absolutely terrible, but outside China it’s quite good,” one manganese producer source said.

Alloys prices are also improving in Europe and the USA.

“Silico-manganese prices are getting better outside China but are terrible inside China,” the manganese producer said. 

Silico-manganese was trading at 6,400-6,600 yuan ($1,044-1,077) in warehouse China, compared with 6,700-6,900 yuan at the start of this year.  

Silico-manganese prices were trading at €810-840 ($1,115-1,156) per tonne on a delivered basis in Europe, up from €800-830 in mid February. 

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Janie Davies
Twitter: @janiedavies_mb