GLOBAL MANGANESE WRAP: Ore, alloy prices keep dropping in China, but rebound in India, Europe

Manganese ore prices inched lower on Friday April 21, reflecting buyers in China who are bidding aggressively, citing weakening domestic manganese alloy prices.

  • High- and low-grade manganese ore prices drop together
  • Silico-manganese futures prices drag physical alloy and ore prices lower
  • Miners resist port ore price weakness with flat and higher offers
  • Manganese alloys rebound in Europe and India
  • Manganese alloy prices remain flat in USA

Metal Bulletin’s 37% manganese ore index fob Port Elizabeth dropped 2 cents to $3.86 per dmtu while Metal Bulletin’s 44% manganese ore index cif Tianjin dropped 5 cents to $5.13 per dmtu.

While each index had shown weakness in the preceding fortnight, this was the first week since early March in which both fell together.

Silico-manganese futures prices, which prompted the March rally in manganese ore prices, have been falling in recent weeks, taking manganese ore port prices down with them.

The most-traded May silico-manganese futures price on the Zhengzhou Commodity Exchange (ZCE) ended the week at 6,070 yuan ($882) per tonne, up from the previous Friday’s close of 5,808 yuan.

Metal Bulletin assessed Chinese spot silico-manganese at 6,100-6,500 yuan per tonne in warehouse China on Friday April 21, down 400-500 yuan on the week.

Metal Bulletin’s ferro-manganese price quotation in warehouse China held at 6,300-6,500 yuan per tonne.

Most manganese ore traders cut their spot offer prices for manganese ore in the ports and were reluctant to purchase fresh seaborne cargoes from miners, believing prices will drop further still.

“We believe the alloy market will continue to fall because there’s no improvement in demand. The low futures price will continue to put downward pressure on spot prices and on the ore market,” one major manganese ore trader in China told Metal Bulletin.

Outside China, miners upheld recent offer levels and some increased offer prices, citing continued strong demand. But most acknowledged weakness in China had knocked the market.

“There have been certain worries about ferro-alloy prices in China dropping. The market is still strong but there is some pressure,” a source at one miner told Metal Bulletin.

The 3 million tonnes of manganese ore in Chinese ports also continue to undermine the market, especially prices for South African material, which makes up almost half the total volume.

“Spot port ore prices have dropped lower than seaborne prices already, especially the South African semi-carbonate ores of which volumes in the ports are large, so few market participants intend to buy today,” a second major trader told Metal Bulletin.

In Europe and India, the reverse happened – manganese alloy prices strengthened amid strong demand, including consumer buying.

Silico-manganese prices in India rose to $1,040-1,110 per tonne fob on April 21 from $1,000-1,100 previously.

“Demand for alloy is good across India and Malaysia. The downtrend has stopped,” a manganese alloy producer told Metal Bulletin.

European silico-manganese prices rose to €1,040-1,115 ($1,116-1,196) per tonne on April 21 delivered from €1,000-1,115 per tonne previously.

“Clearly, several steel mills are back in the market. They had expected silico-manganese prices to fall but they didn’t and we’re holding firm with our offers at €1,060-1,080; €1,000 is not available,” the producer source added.

Ferro-manganese prices held in Europe at €1,200-1,280 per tonne delivered on April 21.

“There’s pressure to increase but the market is not yet willing to accept it,” a market source told Metal Bulletin.

But pressure was on the upside while steel mills sought units.

“It’s a similar story to silico-manganese; several steel mills are back in the market,” a second producer source told Metal Bulletin, reporting offers and concluded deals in the range of €1,260-1,280 per tonne.

In the USA, prices for both silica-manganese and ferro-manganese held steady in thin trading conditions.

Silico-manganese prices traded at 65-68 cents per lb in warehouse Pittsburgh on April 20, according to Metal Bulletin sister publication AMM’s latest assessment.

High carbon ferro-manganese traded at $1,380-1,430 per long ton in warehouse Pittsburgh on April 20, according to AMM’s assessment.

“It has been pretty quiet in terms of new enquiries and new business. There really hasn’t been much at all going on over the last week-and-a-half,” a supplier source told AMM.

“Demand is still decent and there’s not really much material in the market. Really at this point there is no reason to change pricing at all, especially on ferro-manganese,” the first supplier source said.

Despite the inactivity, overall demand remains healthy, with suppliers reporting strong off-take on long-term contracts. This form of demand has kept supply tight, leaving little impetus for suppliers to lower pricing.

“Customers on long terms are taking very healthy amounts,” a third supplier source told AMM.

For more information on the current manganese market, take a look at our dedicated page for manganese market analysis.