GLOBAL MANGANESE WRAP: High-grade ore price rally continues as low-grade pauses

High-grade manganese ore prices continued rising on Friday June 9, as low-grade prices held and manganese alloys staged a mixed performance across global regions.

• 44% manganese ore index rises 10 cents
• 37% manganese ore index holds
• Chinese alloy prices drop
• Ferro-manganese strong on tight supply in USA
• Alloy prices stable to firm in India and Europe

Metal Bulletin's 44% manganese ore index, cif Tianjin climbed 10 cents to $6.14 per dmtu.

Metal Bulletin's 37% manganese ore index, fob Port Elizabeth was calculated at $4.62 per dmtu, stable week-on-week. This is equivalent to $5.16 per dmtu cif Tianjin.

Strength remained in the higher-grade market, as several deals were transacted above $6 per dmtu.

“High-grade miners offered higher and were able to book," a trader told Metal Bulletin. "They usually book once a month, but if they need to come back to the market, I’d expect similar numbers or slightly lower."

Some market participants said the manganese ore rally has lost some steam, pointing to weaker alloy prices in China, particularly on the futures exchange.

“It’s a bit lower than last week,” one trader active in the low-grade market said.

“People are concerned about paying $5.25 cif. They don’t want to book at this level and get caught holding high-price ore [in case prices fall]," a producer told Metal Bulletin. 

Metal Bulletin assessed spot domestic Chinese silico-manganese at 6,500-6,800 yuan ($956.31-$1,000.45) per tonne on Friday June 9, down 200 yuan per tonne compared with the previous week. 

Metal Bulletin assessed spot domestic Chinese ferro-manganese at 6,300-6,400 yuan per tonne on Friday, down from 6,300-6,500 yuan the previous week.

The most-traded September silico-manganese futures contract on the Zhengzhou Commodity Exchange closed at 6,274 yuan per tonne on Friday June 9, down from last Friday’s close of 6,474 yuan per tonne.

US FeMn prices strengthen
Manganese alloy prices fared better outside China. Ferro-manganese prices in the US spot market continued to strengthen, bolstered by tight supply.

High-carbon ferro-manganese, in-warehouse Pittsburgh, increased to $1,440-1,500 per long ton on Thursday June 8, up $20 at the high end of the trading range, according to Metal Bulletin sister publication AMM’s latest assessment.

The spot market remained active last week as both traders and consumers sought to cover short positions and third-quarter and second-half negotiations continued.

“It seems like high-carbon ferro-manganese is getting extremely tight in the USA, as we had both suppliers and mills, that were uncovered, coming to us for material last week,” a supplier source told AMM.

“We did what we could with the consumers, but we don’t really have enough inventory to help out the trade at the moment,” he added.

A number of traders have been left short, a second supplier source agreed.

“Sentiment is pretty loud and clear; inventories are very tight and there are still a ton of traders out there looking for material because they are too short right now,” the second source told AMM.

Several mills remain uncovered for third-quarter or second-half requirements, sources reported, saying this should continue to keep short-term activity elevated.

“There are still a lot of mills that have not completely covered themselves yet, with some yet to come out and several others that were not able to get everything they needed the first time around,” a third supplier source said.

“No one has that much sitting around to offer right now,” the source added.

Silico-manganese prices weakened slightly, falling to 63-67 cents per lb, in-warehouse Pittsburgh on June 8, from 65-68 cents per lb previously.

Market participants indicated that silico-manganese stocks in the region have not been as tight as high-carbon ferro-manganese stocks, allowing prices to slip during negotiations for third-quarter and second-half requirements.

US prices have been seen at significant premiums to the overseas markets in recent weeks, allowing more room for competition through imports.

“The gap between silico-manganese in Europe and in the USA has been pretty sizeable for a while now," a supplier source told AMM. "It makes sense that it will start to shrink at some point.”

In India, silico-manganese traded in a tighter range and market participants predicted stability could continue for a while. 

Metal Bulletin's price quotation for silico-manganese, fob India came in at $1,090-1,120 per tonne, fob, up $10 at the low end of the range and down $5 on the high.

“Silico-manganese prices are steady and the present offers are in the range of $1,100-1,120 fob. This should remain steady for now,” a trader told Metal Bulletin. 

European silico-manganese held at €1,100-1,150 ($1,232.21-$1,288.36) per tonne, delivered, according to Metal Bulletin's latest assessment.

“Sentiment is positive. It’s €1,100-1,150 today, but maybe it’ll be higher next week as the tone is strong," a market source said. 

Ferro-manganese prices also remained stable, at €1,200-1,280 per tonne, according to Metal Bulletin's latest assessment.

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