GLOBAL MANGANESE WRAP: Miners cut offers to entice Chinese ore buyers

Steel production cuts in China have hit raw materials demand, prompting manganese ore miners to cut offer prices.

  • Miners compete for business in China, with lower offers
  • Steel production cuts weight on ore and alloy demand
  • Alloy prices flat in India and Europe
  • US ferro-manganese prices edge up as suppliers hold firm

Manganese ore prices dropped on Friday November 3 as miners lowered offer prices to China in response to steel production cuts dampening raw materials demand.
Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth dipped 18 cents to $4.76 per dry metric tonne unit, equivalent to $5.46 per dmtu on a cif China basis.

Metal Bulletin’s 44% manganese ore index, cif Tianjin lost 14 cents to settle at $6.34 per dmtu.

A major South African miner cut its offer price for 37% material to $5.50 per dmtu for December delivery, down 15 cents compared with prices seen in recent weeks.

There was aggressive competition between miners, leading to further deals and offers reported at $5.35-5.40 per dmtu.

Still, miners continued to play down the price decline, saying demand prevails even as buyers resist recent higher prices.

“The market has come down a bit from $5.65 but not as much as we expected. I’m not worried because I still see liquidity in China. I can’t see a collapse but I do see weakening into January and February,” a miner told Metal Bulletin.

Spot manganese ore prices at Chinese ports also fell, tracking silico-manganese prices lower, as the alloy continues to bear the brunt of steel production cuts.

“The manganese ore price outlook is more positive than the Chinese silico-manganese price, as lower manganese ore imports coupled with comparatively low inventory in Chinese ports will lend help to ore prices,” a major ore trader in North China told Metal Bulletin.

Manganese ore inventories in Tianjin and Qinzhou ports fell to 2.2-2.4 million tonnes on Wednesday November 1, down from 2.3-2.4 million tonnes on October 18, according to Metal Bulletin’s assessment.

Chinese manganese ore imports fell in September to 1.6 million tonnes, down 6.54% year on year and 14.7% from August.

Furthermore, Metal Bulletin understands that UMK, one of South Africa’s largest miners with mine capacity for 240,000 tonnes per month (tpm), will only be shipping about 25% of its normal volume between November and January, due to technical issues.

By contrast, Chinese silico-manganese producers continue to pump out material despite lower demand.

“Chinese silico-manganese output remains high. There is a competition between producers to grab market share; they are not willing to give up production, even though demand has decreased,” the manganese ore trader added.

Metal Bulletin’s assessment for physical spot Chinese silico-manganese fell to 6,400-6,800 yuan ($970-1,030) per tonne on Friday, from 6,600-7,000 yuan per tonne a week earlier.

November silico-manganese tender prices from major steel mills have also dropped. Nanjing Iron & Steel Company (Nisco) reduced its price to 6,970 yuan per tonne delivered, compared with 7150-7,780 yuan in October, while the tender price of Shagang Group dropped 1,000 yuan to 6,850 yuan per tonne.

Metal Bulletin’s quotation for Chinese ferro-manganese was unchanged in the week at 6,300-6,500 yuan per tonne on Friday.

US prices firm; EU market subdued
Elsewhere, manganese alloy prices were flat amid subdued spot business.

The US was the only region to record an improvement, as high-carbon ferro-manganese prices firmed due to consolidated supply.

Spot prices for high-carbon ferro-manganese, in-warehouse Pittsburgh firmed $5 to $1,530-1,580 per long ton on Thursday, according to American Metal Market’s latest assessment.

Spot market activity has been thin in recent weeks while the market focuses on long-term contract negotiations.

Market participants credited strength in raw materials and global alloy prices as well as a lack of supply choice.

“We are still in a situation where there aren’t a lot of outlets for buyers looking for material, so suppliers have a lot of pricing power,” a supplier source told American Metal Market.

Market participants said they expected high-carbon ferro-manganese prices to hold firm in the near term.

Spot prices for silico-manganese, in-warehouse Pittsburgh held at $0.61-0.63 per lb on November 2, unchanged from the previous week, according to American Metal Market.

Metal Bulletin’s price quotation for high-carbon ferro-manganese, delivered in Europe held at €1,090-1,180 ($1,266-1,371) per tonne.

Silico-manganese prices delivered in Europe held at €990-1,050 per tonne, according to Metal Bulletin assessments.

Meanwhile, Metal Bulletin’s assessment for silico-manganese, fob India held at $1,120-1,150 per tonne.

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