GLOBAL MANGANESE WRAP: Ore prices broadly stable amid thin trading; alloy prices dragged lower by lacklustre demand

Manganese ore prices were stable to slightly softer on Friday October 13 amid a lack of significant trading activity following the Chinese Golden Week holiday, while alloy prices were weighed down by lacklustre demand.

  • Manganese ore prices little changed on thin trading activity
  • Chinese market slows following holiday, alloy prices soften
  • Indian silico-manganese market weakens amid lack of demand
  • EU, US markets plagued by inactivity

Ore prices broadly stable
Manganese ore prices were broadly stable this past week amid thin trading activity, with the 37% index seeing a marginal decline due to a lowering in Chinese silico-manganese and ferro-manganese prices, while the 44% held steady, supported by firm offer prices from major miners.

Metal Bulletin’s 44% manganese ore index, cif Tianjin was flat week on week at $6.54 per dmtu on October 13, supported as major miners maintained firm offer prices for November delivery.

“A major manganese ore miner has rolled over their 45.5% manganese contained Australian lump November delivery offer price at $6.85 per dmtu, while their South African lump offer price for November delivery was not released, possibly due to transportation delays at the South African port of Richard’s Bay,” a source told Metal Bulletin.

South Africa's state-owned freight and logistics company Transnet is working on recovering its terminal facilities in Richards Bay, where exports of manganese and chrome are shipped to Asia and Europe, after severe storms last week.

“Australian lump has been dealt at the miner’s offer price [$6.85 per dmtu] in the Chinese market. Given the yuan appreciation from September to October, the offer price on a dollar basis is rather fair,” a major buyer of Australian lump said.

“Prices are quite stable and there are positive indications. Manganese ore stocks are not high and the fact that we saw no big move lower [in prices] even with China out of the market is a good sign,” a trader source said.

Others reflected on the delicate balance in the market, given that trade activity has slowed in recent weeks due to the Chinese holiday.

“We are more cautious. There’s not been a correction yet, and that’s not to say there will be, but people are focused on the potential downside – it’s a fragile balance at the moment,” a second trader said.

Meanwhile, a France-based mining company has also slightly raised its offer price for 44.5% manganese ore contained lump from Gabon for November delivery, according to a third trader.

“The company set its November delivery offer price at $6.50 per dmtu, up $0.10 from October’s level,” the trader said.

“Gabon’s 44.5% manganese contained lumps are the first replacement for Australian cargoes,” the second trader added.

Meanwhile, Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth dipped two cents to $5.08 per dmtu on October 13, due to a weakening in Chinese alloys prices and the expectation of decreased demand for ore from the steel industry.

“With the Chinese government’s great determination to improve air quality in winter, steel output is forecast to decrease … from November until next March. With steel production down, alloys demand will also decrease, which will result in decreased demand for manganese ores,” a northern Chinese manganese trader said.

Chinese silico-manganese prices slide on weak demand

Chinese silico-manganese prices fell this past week due to weakened demand following the Chinese Golden Week holiday.

Metal Bulletin’s price quotation for physical spot Chinese silico-manganese prices dropped to 7,000-7,200 yuan ($1,062-1,092) per tonne on October 13, from 7,300-7,400 yuan per tonne previously.

“Spot trading activity has been thin after the holiday, while the depressed futures price has also cast a shadow on the spot market,” a trader said.

The most-traded January silico-manganese contract on the Zhengzhou Commodity Exchange closed at 6,600 yuan per tonne on October 13, significantly lower than the September high of 7,506 yuan per tonne reached on September 18. Days after the futures price had reached its September high, the spot silico-manganese price climbed to its highest level since January at 7,350-7,500 yuan per tonne on September 22.

Metal Bulletin’s quotation for Chinese ferro-manganese (min 65% Mn) prices remained stable at 6,750-7,000 yuan per tonne on October 13, as spot supply is still in tight hands.

However, traders have taken a more cautious approach to buying large volumes of the alloy, with the view that prices could decline in the near term.

“There might be a downward pressure for high-carbon ferro-manganese after weeks of rallying, or at least some consolidation,” a trader said.

Indian silico-manganese prices soften, deprived of demand
Indian silico-manganese prices dipped last week, succumbing to weaker demand during the holiday season.

Metal Bulletin’s fob India silico-manganese (65% min Mn, 16% min Si) price was assessed at $1,130-1,180 per tonne on October 13, down from $1,175-1,210 per tonne previously.

“Higher prices were still in focus in September, with negotiations under way for fourth quarter supply contracts, but ultimately these prices aren’t sustainable when demand is lower,” a producer said.

Higher ore prices continue to limit the downside for silico-manganese prices, however.

“That’s the main thing underpinning the Indian alloy price,” a second producer said.

US, EU markets see minimal activity
The US high-carbon ferro-manganese market weakened, as suppliers began to offer more competitively as the fourth quarter progresses.

US spot prices for high-carbon ferro-manganese slid to $1,515-1,575 per long ton on October 12, down from $1,515-1,600 per long ton previously, according to Metal Bulletin sister publication AMM’s latest assessment.

Spot market activity has slowed down over the last few weeks, leading traders and suppliers to ease offers in order to continue to move tonnages.

“Prices near $1,600 seemed more opportunistic than a representation of the real market. It wasn’t going to last,” a supplier source told AMM.

As the market has slowed down, traders have felt less pressure to cover short positions, leading to softer prices on the high end of the range.

“High-carbon ferro-manganese is definitely losing some of its lustre. The correction was always due at some point,” a second supplier source said.

Meanwhile, the US silico-manganese market flattened, as inactivity kept price movement at bay.

US spot prices for silico-manganese were unchanged week on week at 61-63 cents per lb on October 12, according to AMM’s latest assessment.

Activity slowed to a halt this week, with minimal transactions being reported. Pricing flat lined as result.

Similarly, European manganese alloys held firm amid a lack of significant spot market activity over the past week.

Prices for ferro-manganese held at €1,100-1,200 ($1,298-1,415) per tonne, while silico-manganese prices remained at €1,000-1,100 per tonne, according to Metal Bulletin’s latest assessment.

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