GLOBAL MANGANESE WRAP: Ore, alloys prices find strength in Asia, USA; Europe flat in summer lull

Manganese ore and alloy prices mostly held firm last week, as markets defied the traditional summer lull to post gains everywhere except Europe.

• Manganese ore indices up on strong trading activity
• Silico-manganese futures prices supported by physical demand
• US ferro-manganese prices at 86-month high
• Traditional summer slowdown bites in Europe

Manganese ore prices gained slightly last week, buoyed by a pick-up in traded volumes and strong sentiment from the steel sector. 

Metal Bulletin’s 37% manganese ore index climbed to $4.10 per dmtu fob Port Elizabeth on Friday July 14 from $4.06 a week earlier. The 44% index reached $6.02 per dmtu cif Tianjin, up from $5.85. 

The market remained divided on price direction, with some highlighting a potential reduction in demand from India, while others noted that strong steel expectations in China have supported sentiment.

Spot traded volumes surged last week, even as talk of a large stock build-up in China spread.

This week, Metal Bulletin assessed port inventory of the ores in major Chinese ports of Tianjin and Qinzhou at about 2.6-3 million tonnes, down from 2.8-3.1 million tonnes two weeks ago. But some sources outside China believed that volumes elsewhere in China have grown recently. Metal Bulletin does not assess these regions at present. 

Inventory of high-grade ore was reported much lower when compared with semi-carbonate ores, sources said in China.

The high-grade premium has widened recently as stocks of 37% material have grown due to a surge in exports from South Africa.

However, sources outside China argued that the wide gap is likely to be temporary, as some traditional higher-grade buyers, in a position to use either grade in their processes, have been looking for 37% units because of the price differential.

“There’s been a sudden upswing in the market. There’s huge demand from China over the last four or five days,” one source active on 37% said.

However, the surge in demand comes at a time when many others had been expecting a price dip. Before the recent price rises, several sources had been on the sidelines awaiting clear market direction, after several weeks of limited price moves. Supply-side sources had expressed concern about a potential reduction in demand from India, where large volumes have headed in the first half of the year. Several sources said Indian buyers had stocked up on ore, and purchases could now be limited as a result.

“The market is almost in limbo – people are waiting for clear direction. People are comfortable with the $4.50 price range on low-grade and I’m seeing consumer demand. Everyone can make money at that level. This stability will change from mid-August; India has been taking the volumes but has stopped now and Chinese stocks will go up,” a second market source told Metal Bulletin.

But while some expect a weakening in prices, in China, the mood, reflecting price developments captured by Metal Bulletin, was strong. Sources said that port manganese ore prices continued to move up last week as market sentiment remained strong regarding the near-term outlook on the current good demand from the steel market.

Port offers from traders on high-grade ores like Australian lump were at 54-55 yuan per dmtu fot Tianjin ($6.6-6.70), up 2-3 yuan a week earlier, while South African semi-carbonate lump prices concentrated in the range of 40-42 yuan per dmtu ($4.8-5.0), up 3-4 yuan when compared with the beginning of last week, according to sources in China.

Alloy strength
On the alloy markets, Metal Bulletin assessed silico-manganese prices in the Chinese spot market at 6,500-6,600 yuan ($959-974) per tonne on Friday, having narrowed slightly upwards from 6,400-6,600 yuan a week earlier. Chinese ferro-manganese prices remained flat at 6,100-6,300 yuan per tonne on the week. 

Sources said that continued strength will still depend on the steel market.

A major trader said that South Africa had sold a lot of cargoes in June and July to China.

Given the support from the physical market, silico-manganese futures prices also kept firm this week and reached a new high on Tuesday of 6,664 yuan per tonne, the highest level since June 1. The contact finished the week at 6,590 yuan per tonne on Friday, up from last Friday’s close price of 6,564 yuan.

Alloys held firm elsewhere too.

The US high-carbon ferro-manganese market exhibited strength once again last week, as sellers had little issue in finding willing buyers despite continuously elevating offering prices. 

US spot prices for high-carbon ferro-manganese swelled to an 86-month high, reaching $1,480-1,540 per long ton on July 13, up 1% from $1,470-1,520 per long ton, according to Metal Bulletin sister publication AMM’s latest assessment.

The upward price move marks the fourth consecutive weekly increase within the high-carbon ferro-manganese market, with prices now up 2.7% from $1,440-1,500 on June 15, while spot prices were last at current levels in May 2010.

Despite the arrival of the typically sluggish summer period, spot prices have yet to suffer any downturn, instead thriving through a time typically characterised by weaker prices.

A tight market remains the impetus behind the bolstered price level, as prospective spot market buyers have had few purchasing options.

“If you have to go out and find high-carbon ferro-manganese in the spot market, you are going to have to pay dearly for it,” a supplier source said to AMM.

“There simply is not much availability, and those that actually have stock have been able to get their prices,” he added.

Availability of material with a low phosphorous content has been particularly thin, sources said.

“Low phosphorous material is so hard to find right now that anyone who has it can essentially just name their price,” a second supplier told AMM.

Despite expectations that prices would undergo a downward correction after ore prices fell off from their highs at the start of the year, alloy prices have remained resilient, particularly within the USA.

Market participants suggested that prices would continue to avoid any backslide in the near term, bucking consistent expectations otherwise.

“There has been discussion about lower numbers on a forward basis, but that is all talk at this point,” a third supplier source said. “Frankly, we’ve been hearing that for much of the year, yet prices have become even stronger.”

“No one has had the guts to take a chance otherwise, so those lower forward numbers will continue to be ‘what ifs’,” he added.

Meanwhile, US silico-manganese prices held flat at 62-65 cents on July 13, unchanged from the previous week, according to AMM. 
Indian silico-manganese prices (65%) also found strength, reaching $1,080-1,130 per tonne fob, from $1,060-1,110 on good domestic demand. 

In Europe, in contrast, silico-manganese and ferro-manganese prices were stable on a traditional summer slowdown. Silico-manganese prices held at €1,040-1,080 ($1,193-1,239) per tonne, while ferro-manganese price stood at €1,200-1,260. 

“Volumes are lower. There was a low-priced tender in Europe. I haven’t heard any large deals in Europe,” one source said.