China’s manganese markets have been heating up after South32 announced in its quarterly report on Sunday April 21 that Groote Eylandt Mining Company (GEMCO) export sales and wharf operations could remain suspended for about a year. Seaborne and port-side manganese ore prices have been rising in recent weeks since Cyclone Megan severely affected operations at South32’s GEMCO facility in Australia on March 16-17, leading to a suspension of operations on March 18.
South32 reported that record rainfall and the “second-strongest wind gusts in the past 20 years” resulted in widespread flooding across the island of Groote Eylandt and “significant damage” to critical infrastructure, including to the wharf and port, as well as a haulage road bridge connecting the GEMCO’s northern pits of the Western Leases mining area to the processing plant.
Market participants grew more bullish following the news that South32 expects to recommence wharf operations and export sales in January-March 2025 – the third quarter of the company’s 2025 financial year.
Market supply has been tightening, and port stocks were already lower, sources said on Monday April 22.
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Delayed market reaction after holiday period
While price increases did not immediately follow the weather event and suspension in March, there was a delayed market reaction in the week ending April 12 following public holidays and uncertainty over the estimated time of restoration for GEMCO operations.
The increase continued last week; Fastmarkets calculated its weekly manganese ore high grade index, cif Tianjin at $4.86 per dry metric tonne unit (dmtu) on April 19, up by 1.25% from $4.80 per dmtu on April 12 and by 13.29% from $4.29 per dmtu on April 8.
Port-side market prices of high-grade manganese ore also rose sharply following South32’s announcement, while sentiment was mixed amid traders and smelters, according to sources.
“We do have a jump in [port-side] prices of manganese ore [on Monday], and some sellers at ports have even stopped quoting after hearing the news of longer-than-expected operation suspension of South32’s GEMCO mine,” a Chinese manganese ore trader source said.
Fastmarkets calculated its manganese ore high grade port index, fot Tianjin China at 39.50 yuan ($5.46) per dmtu on April 19, up by 3.13% from 38.30 yuan per dmtu on April 12 and by 10.96% from 35.60 yuan per dmtu on April 8.
A manganese alloy producer source reported a price spike but said it was sentiment-driven, not demand-driven, adding that actual buying had not increased.
“The sentiment in the market was strong, with panic from both traders and smelters for reduced manganese ore supplies to secure manganese alloy production, but deals haven’t increased for Australian ore,” the smelter source said. “Let’s wait and see how far the news goes and how the market reacts later this week.”
GEMCO recovery
So far, South32’s operational recovery has focused on re-establishing critical services and dewatering mining pits, the company said.
“Engineering studies are under way on the [restoration of] wharf and haulage road bridge infrastructure… These studies will inform the final schedule and capital costs,” South32 said.
And alternative shipping options were being evaluated, which could establish “partial ore export capability in advance of the wharf restoration,” according to South32’s quarterly report.
South32 said its Australia manganese saleable production fell by 13%, or 352,000 wet metric tonnes (wmt), to 2,324,000 wmt in the nine-month period ended March due to the suspension of GEMCO operations.
The company’s 60% share in the facility produced 3,545,000 tonnes of high-grade manganese ore in 2023, according to the company’s latest yearly financial report.
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