GLOBAL MANGANESE WRAP: Bullish silico-manganese futures market bolsters low-grade ore prices; global alloy prices firm

Silico-manganese prices in China and India rose last week, boosted by spot ore demand, while US high-carbon ferro-manganese were up for the sixth week in a row on limited availability.

  • Rising silico-manganese futures bolster low-grade ore prices 
  • Chinese manganese alloys markets await August tender announcements 
  • Indian silico-manganese prices rise on low-grade ore strength 
  • US high-carbon ferro-manganese prices continue run on tight supply

Manganese ore prices diverge
A slowdown in concluded deals weighed on sentiment in the high-grade manganese ore market last week, while strong demand and recent rallies in the Chinese silico-manganese futures market helped low-grade prices inch up.

The 37% manganese ore index firmed slightly last week, reaching $4.35 fob Port Elizabeth per dmtu on Friday July 28, up from $4.23 a week earlier. Sources said unseasonably strong demand helped offset the impact of a recent surge in shipments from South Africa

“We understand the market is strong enough. South Africa might be pumping out units, but there’s still not enough available,” one source said.

“Enquiries are coming from everywhere and we’re sold out,” he added.

“People are still pushing for offers and are talking about $4.80 cif and above,” a second source said.

The 44% index slipped slightly, however, after Chinese buyers sought cheaper units. The index fell to $5.99 cif Tianjin, down from $6.10 a week earlier. 

“There’s a typical slowdown at this time of year in China,” the first source said.

Chinese manganese alloys firm awaiting tenders for August
Market participants are now looking for direction from silico-manganese prices.

“It’s quiet now. Most people are waiting for new prices from China,” a second trader said.

Metal Bulletin assessed silico-manganese prices in China’s spot market at 6,900-7,300 yuan ($1,026-1,085) per tonne on Friday July 28, up 200-300 yuan from a week ago; Chinese ferro-manganese prices were assessed at 6,550-6,600 yuan per tonne on Friday, up from last week’s level of 6,100-6,300 yuan.

Hesteel (Hebei Iron & Steel) started its monthly manganese alloys purchases this week, with ferro-manganese purchases finalised at 6,550 yuan per tonne on Thursday, 550 yuan higher than in July. The price included delivery and payment through an acceptance draft.

The stainless steel mill is still negotiating its silico-manganese tender price for August, sources told Metal Bulletin, with smelters holding out for higher bids.

“The mill’s [Hesteel] silico-manganese price is not fixed yet; the latest offer price is at 7,350 yuan [per tonne], but I heard many smelters refused to accept it,” a trader in Shanghai said.

“I guess the tender price may settle at about 7,400-7,500 yuan per tonne this time,” a smelter source said.

Silico-manganese futures on the Zhengzhou Commodity Exchange maintained their strong performance this week, with the most-traded September contract price rising to a new year-high of 7,354 yuan per tonne on Wednesday. It closed the week at 7,112 yuan on Friday, up week-on-week from 6,908 yuan per tonne previously.

Indian silico-manganese prices rise on higher ore costs
Indian silico-manganese prices also firmed last week, with offers around $1,100 per tonne fob thinning as a result of tightening supplies of alloy and higher raw material costs. 

Metal Bulletin assessed silico-manganese prices (65% min Mn, 16% min Si) at $1,110-1,150 per tonne, fob India, on July 28, up from $1,080-1,130 per tonne previously.

Indian manganese alloy prices are typically more exposed to fluctuations in spot manganese ore prices, which have jumped to $7 per dmtu for high-grade stocks in Indian ports, market sources said.

US high-carbon ferro-manganese prices continue to run
The US high-carbon ferro-manganese market remained its uptrend, as prices increased for a sixth consecutive week. 

US spot prices for high-carbon ferro-manganese firmed to a near 87-month high, reaching $1,490-1,560 per long ton on July 27, up $10 on the low end from $1,480-1,540 per long ton, according to Metal Bulletin sister publication AMM’s latest assessment.

Prices strengthened once again despite a continued lack of significant spot market activity.

“We haven’t seen anything of notable size this week, but anything 100 tonnes or less is moving easily at or above $1,500,” a supplier source said to AMM.

A limited availability of prompt supply continues to be the key impetus behind the strengthened prices.

“Some have tried to deny the market is tight, but if the market is so flush with material why am I seeing guys having to import via container? They don’t have the time to use vessels if they want to keep up with deliveries,” a second supplier source told AMM.

“Whatever material is on the ground is super committed, so suppliers have been able to name their price to anyone who isn’t covered,” a third supplier source said.

In addition to supply being tight, a limited number of suppliers are actually holding material at this time.

“The material on the ground is in strong hands. I went out looking this week, and the lowest number I received was $1,490 [per long ton],” a fourth supplier explained.

Another source suggested the current supply situation was cultivated through a larger number of buyers who failed to cover requirements through yearly contracts.

“In a market like ferro-manganese where most contracts are on an annual basis, if you are speculating as a trader, why would you pull extra material for the market if you didn’t book that much on contract,” a fifth supplier source said.

“That is why material is so tight and consolidated, and it is too risky for traders to take a position at this point, so this is unlikely to change,” he added.

Meanwhile, the US silico-manganese market weakened slightly last week, as prices slipped to 61-64 cents per lb on July 27, down 1 cent on both ends of the range from 62-65 cents per lb previously.

Prices have begun to weaken slightly, closing the gap between the USA and overseas prices.

Supply has been viewed as ample; however, a recent shutdown at Felman Production’s New Haven, WV facility is expected to provide some stability for pricing at these levels.

“There isn’t any huge run on pricing because of Felman’s issues, but any weakness that was coming is slowing down,” a supplier source said.

“I think this changes the mentality of other sellers in the market,” a second supplier source said to AMM. “At the very least it signals that they won’t be able to be as competitive for the short term.”

If the facility is down for longer than the expected three week timeline, sources speculated that pricing may start to rebound.

“If this isn’t solved as quickly as expected, then we might see this thing turn back around and start to run up,” the second supplier added.

Manganese alloy prices remained steady in Europe, as a summer slowdown meant limited spot deals. 

Metal Bulletin’s assessment for silico-manganese held at €1,040-1,080 ($1,224-1,272) per tonne, delivered in Europe. Ferro-manganese prices were unchanged at €1,200-1260 per tonne, delivered, for a third week.