Australian lump fot prices are now around 62 yuan ($9.07) per metric tonne unit in Tianjin port, the country’s major manganese ore trading hub, according to sources in China. This equates to about $7.70 per mtu.
Meanwhile fot prices of South African lump are at 52-53 yuan per mtu in Tianjin port, which equates to about $6.50 per mtu. The price difference between the two grades is also about 10 yuan per mtu.
This compares to fot prices for Australian ore at 53-54 yuan per mtu in July versus South African ore at 48-49 yuan per mtu, a price difference of about 5 yuan per mtu.
By comparison, Metal Bulletin’s 37% manganese ore index, cif China slipped six cents to $6.56 per dry metric tonne (dmtu), while the 37% manganese ore index fob Port Elizabeth dropped 10 cents to $5.85 per dmtu on August 31
Metal Bulletin’s 44% manganese ore index, cif Tianjin ticked down three cents to $6.87 per dmtu on August 31.
Producers are puzzled by the growing gap between the two grades because traditionally, both have been in equal demand by steel mills and ferro-alloy producers.
According to market sources however, the recent rally in silico-manganese futures on the Zhengzhou Commodity Exchange has led to higher demand for the 44% manganese grade.
“Silico-manganese producers need the higher grade to make more silico-manganese with better quality and also, profits are higher at 1,000-1,500 yuan per tonne due to active trading,” a trader said. “This has pulled the fot price of the 44% manganese grade higher and higher.”
Currently, 44% manganese supply at the port is not as available as the 37% manganese grade, which also accounts for its higher price, another source said.
“The quality between the 44% and 37% manganese ore grades is a lot bigger when it comes to the finished product,” the above source said.
This comes at a time when Hebei Steel has announced increased tender prices for manganese alloys in September, while Metal Bulletin assessed the Chinese silico-manganese price at 8,800-9,000 yuan per tonne on Friday August 31 - an 8-month high - narrowing higher by 100 yuan on the low end from 8,700-9,000 yuan per tonne on August 24.
Market participants increasingly expect China’s largest steel mills’ recent tender price to set the tone for the silico-manganese market in the next few months, which could possibly push demand for 44% manganese ore up.
Looking forward, most market participants expect the price gap between the two manganese grades to narrow in the coming months.
“The South African producers will take the opportunity to raise their offer prices, narrow the gap between the two grades and maximize their profits,” the first source said.
