GLOBAL MANGANESE WRAP: Ore prices keep rising on higher offers, tight supply

Tight supply of manganese ore at Chinese ports kept prices of the raw material high last week, while silico-manganese futures prices plunged which could dampen prices in the near term, sources told Metal Bulletin.

  • Ore prices rise amid tight supply in China
  • Chinese physical alloy prices strengthen
  • Silico-manganese futures prices drop
  • US ferro-manganese prices advance on limited availability

Manganese ore prices continued upward on Friday September 22, with buyers quick to accept higher supplier offers amid tight supply.

Metal Bulletin’s 44% manganese ore index, cif Tianjin rose 15 cents to $6.58 per dmtu.

Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth rose 2 cents to $5.11 per dmtu, equivalent to $5.70 per dmtu on a cif basis in China. 

Manganese ore stocks in the ports of Tianjin and Qinzhou have fallen to 2.1-2.2 million tonnes as of last Wednesday, down 20% from Metal Bulletin’s assessment on September 6. 

“[Recent] transactions are reasonable, given the supply shortage at the main ports. It is easy to move cargoes in the domestic market and there is an expectation among industry players that prices will remain firm even after China’s Golden Week holiday [October 2-8],” a Chinese trader told Metal Bulletin.

Still, suppliers warned that high prices may not be sustainable due to the threat of oversupply for both ore and alloy further down the line.

“I am seeing really strong demand; I have enquiries every five minutes. What is driving it and how long it will last, I don’t know,” a supplier told Metal Bulletin.

A sharp drop in silico-manganese futures prices in recent days is likely to weigh on sentiment and could dissuade some purchasing, a second supplier told Metal Bulletin.

“There has been a massive drop in silico-manganese futures; that’s definitely going to change sentiment and may cause buyers to hold off,” the supplier source said.

The most-traded January contract on the Zhenzhou Commodity Exchange opened at 7,506 yuan ($1,137) per tonne on September 18, before dropping to 6,676 yuan per tonne on Friday, down 614 yuan compared with the previous week’s close. 

Metal Bulletin’s price quotation for spot physical Chinese silico-manganese prices rose to 7,350-7,500 yuan per tonne on Friday, from 7,300-7,400 yuan previously.

Market participants said the increase in silico-manganese prices has lagged that of manganese ore as the rebar market is not providing sufficient support to justify price rises.

“There is a general expectation that domestic steel production will decline as we move into the fourth quarter. Our customers can only accept very gradual price increases,” a silico-manganese producer said. 

Metal Bulletin’s price quotation for Chinese ferro-manganese rose to 6,800-7,000 yuan per tonne from 6,700-6,800 per tonne previously. 

“Prices for high carbon ferro-manganese rose amid tight supply, as one major supplier is out of stock for the spot market,” a ferro-manganese trader told Metal Bulletin.

Indian prices inch up; Europe mixed 
Indian silico-manganese prices edged slightly higher last week, assessed at $1,180-1,250 per tonne, fob India, on Friday, compared with $1,170-1,250 per tonne previously.

The 65% manganese-16% silicon alloy priced by Metal Bulletin is enjoying a premium to lower grades, with high manganese ore prices deterring production of the high-grade material.

“We have currently stopped buying manganese ores at such a high price and have also changed our silico-manganese [production] to 60/14 grade,” a producer source in India said.

The lower-grade material is more commonly consumed in India’s domestic market, leaving to tight availability in the export market.

Silico-manganese prices in Europe were slightly higher week on week as sellers reported large enquiries from end-users. 

Metal Bulletin assessed silico-manganese prices at €1,030-1,110 ($1,227-1,323) per tonne, delivered in Europe on Friday, up from €1,020-1,100 per tonne previously.

In contrast, ferro-manganese prices dipped slightly in Europe last week, now assessed at €1,180-1,275 per tonne, delivered, compared with €1,200-1,275 per tonne previously. 

Producers have been savouring robust margins after relatively high and stable prices since March this year, leaving some sellers open to bids.

In addition, Indian producers are shipping material to Europe to take advantage of attractive regional prices, sources said.

US alloys prices
In the USA, spot prices for high-carbon ferro-manganese rose to $1,550-1,600 per long ton on Thursday September 21, from $1,530-$1,600 per long ton previously, according to Metal Bulletin sister publication AMM’s latest assessment. 

Spot silico-manganese, in warehouse Pittsburgh held at 60-63 cents per lb, unchanged from the previous week, according to AMM.

Suppliers reported booking ferro-manganese at high levels with ease amid tight supply.

“I’m not offering anything below $1,580 [per long ton] and that is to my regular customers. I’m not offering into the trade at less than $1,600 and I’m not having any trouble selling at these numbers,” a supplier source told AMM.

While the market has remained tight, market participants similarly continued to credit the consolidated nature of supply for the strength in prices.

In addition to the tight supply, healthy demand has kept pressure on the market, sources said.

“Off-take and usage rates were healthier than usual through the summer, so there is a lot of optimism heading into the fourth quarter,” the second supplier source added.

Meanwhile, the spot market for silico-manganese remained stagnant, leading market participants to lack optimism about price increases in the near future.

“Everyone I spoke to over the last couple of days seems to be well covered on silico-manganese. I’m not expecting to see many spot opportunities heading for fourth quarter requirements,” a supplier source told AMM.

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