GLOBAL MANGANESE WRAP: Asian alloys maintain strength while ore stabilises [CORRECTED]
Manganese ore prices began to show signs of stability last week while Asian alloy prices continued to exhibit strength.
- Manganese ore market stable after recent jumps
- Market watching Hebei Steel for April silico-manganese tender
- Similar sideways trends in European ferro-manganese and silico-manganese markets
- Tightness keeps US markets steady for now
Manganese ore prices were largely stable last week; the market steadying after recent dramatic jumps. 37% prices climbed slightly while 44% material inched six cents lower.
The 37% manganese ore index reached $3.91 per dmtu fob Port Elizabeth on Friday April 7, up 1.6% from $3.85 per dmtu a week earlier. Meanwhile, the 44% index dipped slightly to $5.15 per dmtu cif Tianjin from $5.21 per dmtu in the previous week.
Activity had been more limited than a week earlier although demand had still been reasonably strong, sources said.
“It’s been quiet. The only significantly volume was going at similar levels to last week so we’d probably roll over our prices if we were to offer,” a mining source told Metal Bulletin.
Port inventories are believed to have dropped by about 300,000-400,000 tonnes to around 3.2 million tonnes over the last month after smelters turned more active amid rising prices, according to sources.
“There’s no reason to decrease prices. There’s no sign of weakness. In fact, port inventories have dropped. It was 3.5 million tonnes and is now closer to 3.2 [million tonnes]. Smelters are taking more ore from ports,” a second mining source said to Metal Bulletin.
“It’s either restocking or an increase in silico-manganese production,” the second miner added.
“Demand is good,” a supplier source agreed.
Asian manganese alloys maintain strength
Chinese spot market prices for high-carbon ferro-manganese climbed to 6,600-6,800 yuan ($955-984) per tonne on April 7, up 4.7% from 6,200-6,600 yuan per tonne previously, according to Metal Bulletin’s latest assessment.
Meanwhile, the Chinese spot market for silico-manganese remained stable this week, with sentiment reflecting the movement in Hebei Steel’s tender.
Chinese prices for silico-manganese held steady at 6,800-7,000 yuan per tonne on April 7, according to Metal Bulletin’s assessment.
Market participants continued to await news about Hebei Steel’s April silico-manganese tender – the steelmaker has yet to make an official announcement.
Although it has not yet set a price, sources indicated that the mill might pay higher prices to smelters that can sell larger quantities as well as change its payment terms to cash, leading market participants to suspect the mill may be low on silico-manganese stock and might therefore buy in larger volumes.
Sources suggest prices will reach 6,800-6,900 yuan per tonne, up markedly from 5,200 yuan per tonne in March.
“From [the talk surrounding] Hebei Steel’s tender, we can see that mills’ demand for alloys is robust and can give some support to the alloys prices,” a trader in Shanghai said.
Meanwhile, Indian silico-manganese prices, which are typically highly sensitive to manganese ore prices, continued to rise last week.
Indian silico-manganese prices increased 2.9% to $1,000-1,100 per tonne on April 7 from $980-1,060 per tonne previously, according to Metal Bulletin’s latest assessment.
“There’s a shortage of manganese ore in India,” a trading source told Metal Bulletin.
European, US alloy markets hold steady
European silico-manganese prices were stable last week, with prices holding at €1,000-1,115 ($1,058-1,180) on April 7, according to Metal Bulletin’s assessment.
The sudden and dramatic rise in manganese ore prices recently has boosted confidence among alloy sellers in Europe, particularly while buyers have been looking to secure units, having previously shown limited interest.
But while interest has grown, material was changing hands mostly in line with the ranges quoted during the previous week.
Silico-manganese prices were stable but buyer demand has picked up due to the sudden jump in manganese ore prices, sources said.
“I’ve been pleasantly surprised. Manganese ore came up and that’s had an effect on alloy. People had expected ore to keep falling, so didn’t commit to buying much alloy. They walked away thinking they’d come back when prices were lower. Now they’re rushing back to buy earlier than expected,” a silico-manganese supplier source told Metal Bulletin.
The source indicated that he was successful selling in the mid-€1,000s, up from €1,020-1030 a few weeks ago.
There was, however, a low tender that was believed to have taken place at below the previous range.
European high-carbon ferro-manganese inched €5 higher on the upper end of the range to reach €1,200-1,280 on April 7, according to Metal Bulletin’s latest assessment.
“Ferro-manganese is seeing the same trend as silico-manganese. It could strengthen. Prices were under pressure a few weeks ago, but that seems to have eased with the manganese ore rally,” a ferro-manganese supplier source told Metal Bulletin.
US silico-manganese prices held steady at 65-68 cents per lb on April 6, according to Metal Bulletin sister publication AMM’s latest assessment.
“Prompt pricing for silico-manganese has really remained unchanged,” a supplier source told AMM. “Demand is good and it is still tight enough in the USA that suppliers are holding off on adjusting prices down at this point.”
“The ore price volatility has the market taking a cautious approach right now,” a second supplier source told AMM. “Until we see that restabilise, I don’t think you will see much of a price correction.”
In addition to a tightened regional supply, recently rising replacement costs from Europe and Asia have helped support pricing at current levels but forward pricing sentiment remains a contentious topic.
“Forward sentiment is pretty hasty, with some buyers trying to push prices down considerably from current levels for second half requirements,” a third supplier source said.
“However, I don’t see where that cheaper material will come from. The Malaysian producers were offering cheaper but not any longer. Some Georgian producers were as well but that has dissipated too,” the third supplier added.
The US high-carbon ferro-manganese market is on similarly firm footing, with tightness in the market limiting potential downside.
US spot prices for high-carbon ferro-manganese slipped slightly to $1,380-1,430 per gross ton on April 6 from $1,380-1,450 previously, according to AMM’s latest assessment.
“High-carbon in the USA is holding very firm,” a supplier source told AMM. “We saw some weakness in Europe and Asia, but it has rebounded pretty well since then.”
“Supply is still very tight, which is keeping prices quite firm,” a second supplier source said. “Out of all the ferro-alloys, ferro-manganese might be the most stable.”
Market participants indicated that concerns regarding the US Defense Logistics Agency’s (DLA’s) ferro-manganese sale have dissipated after the agency opted not to sell its entire allotment.
“We were concerned that the DLA sale might start a downward spiral on prices but they did not sell everything they had available and those who bought it aren’t likely to sell cheaply,” a third supplier source said to AMM.
With available supply viewed as limited, and mills consuming at elevated levels, market participants suspect pricing will maintain its current strength.
“Mills have been taking at a faster clip and there isn’t much around – we shouldn’t see much room for downside,” a fourth supplier said.
This article was updated on Wednesday April 12 with a correction to the price table for the 44% and 37% manganese ore indices. It previously showed the assessments for the weeks ending March 24 and 31.