GLOBAL MANGANESE WRAP: Chinese alloy, ore prices slide while remaining markets hold course

Reports of logistical disruptions in South Africa failed to support manganese ore prices last week with lacklustre demand weighing on Chinese manganese alloys and ore prices, while alloys around the globe stayed flat.

  • Manganese ore prices slide as market fails to resume activity following Chinese holidays 
  • Ore shipments disrupted by extreme weather conditions in South Africa 
  • EU, US markets maintain course amid limited activity

Manganese ore prices edge down on lacklustre demand
Manganese ore prices were lower on Friday October 20 because of lacklustre demand from China after local governments tightened control on steel mills’ operation rates to improve air quality, as well as higher manganese ore inventory in Chinese main ports.

Activity has barely resumed since the Golden Week holiday at the beginning of the month.

A number of sources expect shipment delays of manganese ore from South Africa due to logistical disruptions. Durban port has been hit by extreme weather and rail services from the Hotazel mining region were halted last week after a train driver was killed in an accident.

“At this stage [the weather-related disruptions] haven’t had an effect [on prices] but the damage done in Durban port could have a knock on effect on Port Elizabeth,” a source at a miner told Metal Bulletin.

“Only Durban has had a problem; it lost 10-15 days’ work so 150,000 tonnes of ore will be shipped with delays,” a second mining source said.

So far, Metal Bulletin has not heard reports of specific shipment delays affecting any one company or customer. 

Metal Bulletin’s 44% manganese ore index, cif Tianjin was calculated at $6.47 per dmtu on October 20, down from the previous week’s $6.54. 

Meanwhile, Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth dipped five cents to $5.03 per dmtu on October 20, due to a weakening in Chinese alloys prices and the expectation of decreased demand for ore from the steel industry.

“[There is] a lack of new offer prices from South Africa for December deliveries for this week as Chinese market participants’ buying interest is fading,” a manganese ore trader based in Shanghai said.

“South African miners for semi-carbonate ores are waiting for the market to change, but it seems there is no indication the market will improve in the winter, because Chinese steel mills’ operation rates will fall,” the ore trader added.

In the week before last, main Australian miners and Gabon miners released almost flat offer prices for November deliveries, but “given the yuan’s appreciation from September to October, the flat offers are actually lower when converted to yuan, and Chinese buyers have been quick to accept and book out these offers,” a second major manages trader said.

Increasing manganese ore inventories in Chinese main ports also indicate a slower rhythm of deliveries from ports to Chinese silico-manganese mills. 

Chinese Tianjin port and Qinzhou port’s manganese ore inventory increased to 2.3-2.4 million tonnes on October 18, up from 2.1-2.2 million tonnes on October 3.

Weaker silico-manganese demand weighs on prices
Chinese silico-manganese prices dipped on the low end last week, with the market wary of possible winter capacity cuts at steel mills under environmental supervision. 

Metal Bulletin’s price quotation for physical spot Chinese silico-manganese dropped to 6,800-7,200 yuan ($1,026-1,087) per tonne on Friday, from 7,000-7,200 yuan per tonne previously.

“Spot silico-manganese prices are lower, affected by lower operation and demand from the steel side over the winter,” a silico-manganese trader noted.

Major silico-manganese smelters are attempting to keep their offer prices close to previous levels, which widened the price range, and market participants indicated it might be related to their high operational costs.

China’s Ministry of Industry & Information Technology (MIIT) revealed that the country’s steelmaking capacity cuts for this year had been completed ahead of schedule during the 19th National Congress of the Communist Party of China which started on October 18. The announcement also brought ferrous futures under pressure on Friday.

“The government will continue to implement capacity cuts to make the steel sector leaner,” Miao Wei, of MIIT, said in a press conference on October 19. 

Metal Bulletin’s quotation for Chinese ferro-manganese (min 65% Mn) prices dipped to 6,700-6,900 yuan per tonne on October 20, from 6,750-7,000 yuan one week ago, with one major producer lowering its offer by 100 yuan per tonne this week.

Chinese ferro-manganese price had been on a steady ascent since late July and rose almost 11% by October 13, according to the Metal Bulletin assessment.

“The weak demand is no longer able to support the previous rally anymore,” a second trader said.

Meanwhile, Indian silico-manganese (65% min Mn, 16% min Si) prices were assessed at $1,130-1,180 per tonne on October 20, unchanged from the week prior, according to Metal Bulletin’s latest assessment.

US, EU market maintain course
The US high-carbon ferro-manganese market levelled off last week as the spot market lacked major activity. 

US spot prices for high-carbon ferro-manganese were assessed at $1,515-1,575 per long ton on October 19, unchanged from the previous week, according to Metal Bulletin sister publication AMM. 

The spot market fell dormant last week, with very few spot transactions being reported.

“Most people are focused on long-term contracts right now, and mills don’t have much of a need for spot material at the moment,” a supplier source said.

Despite the lack of spot market demand, market participants noted pricing had held fairly firm.

“The high-carbon ferro-manganese price still seems to be fairly strong. We thought we would see prices fall further at this point, but we haven’t seen much of a decline. The market is still almost at its peak,” a second supplier source said.

Market participants credited strong ore prices and healthy overall demand for the continued firm prices.

“Ore prices have remained firm through much of the year, and we still have solid overall demand underlying all of this, so prices have held much firmer than some may have expected,” a third supplier source said.

Similarly, the US silico-manganese market remained flat, as the spot market continued to see very few transactions. US spot prices for silico-manganese held steadily at 61-63 cents per lb on October 19, unchanged from the previous week.

Meanwhile, European manganese alloys once again held steady last week.

Prices for ferro-manganese to major European destinations remained at €1,100-1,200 per tonne on October 20, while silico-manganese prices held between €1,000-1,100 per tonne, according to Metal Bulletin’s latest assessment.