GLOBAL MANGANESE WRAP: Ore prices keep rising, fuelled by SiMn futures

Manganese ore prices continued rising on Friday July 21 as a result of a rally in silico-manganese futures prices earlier on the week and a stronger steel sector.

  • Manganese ore prices still advancing
  • SiMn futures prices hit 2017 high
  • US ferro-manganese prices high amid tight supply
  • SiMn prices hold in India, Europe and the USA

Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth rose 13 cents to $4.23 per dmtu. 

Metal Bulletin’s 44% manganese ore index, cif Tianjin rose 8 cents to $6.1 per dmtu. 

Offer prices jumped in Chinese ports and miners tested the market with higher seaborne offers as rising silico-manganese futures prices prompted a flurry of demand between Monday and Wednesday.

“Port prices increased further this week. Although trade is not very active, market confidence has improved in line with the strong silico-manganese futures performance as well as the robust steel market,” a trader in Shanghai told Metal Bulletin.

The most-traded September contract price for silico-manganese on the Zhengzhou Commodity Exchange reached a 2017 high of 7,224 yuan ($1,069) per tonne on Tuesday. It later dropped and closed the week at 6,908 yuan on Friday, up from 6,590 yuan per tonne the previous week.

“The futures prices rallied earlier this week, which dragged ore up,” a second trader told Metal Bulletin. “It was fuelled by environmental rumours. That brought the speculators in, who bought, driving up prices. But then they sold.”

While most market participants agreed that ore demand has firmed, some said it may not be enough to support sustained higher prices, as exports from South Africa surge.

“There is a lot of material in the market; there’s a lot on the water,” the second trader added.

Metal Bulletin assessed physical silico-manganese prices in China’s spot market at 6,700-7,000 yuan per tonne on Friday July 21, up from 6,500-6,600 yuan the previous week. 

Chinese ferro-manganese prices held at 6,100-6,300 yuan per tonne. 

“Major mills will soon start August purchasing and their bid price is expected to increase,” a major smelter source said.

Tender prices from some small- and medium-sized mills that started purchasing during the week came in at 7,200-7,400 yuan per tonne, up from 6,700-6,800 yuan per tonne in June.

Mills increased their purchase volumes month-on-month as they increased production as a result of to improved profitability, sources said.

Indian silico-manganese prices held amid limited demand, despite gains in recent weeks on the back of ore price strength. 

Metal Bulletin’s price quotation for silico-manganese, fob India held at $1,080-1,130 per tonne.

Outside China, US high carbon ferro-manganese was the only other market to record gains, as limited availability fuelled prices for the fifth consecutive week.

Spot prices for high carbon ferro-manganese, in warehouse Pittsburgh edged up to a fresh seven-year high of $1,480-1,560 per long ton on July 20, up $20 on the high end week-on-week, according to Metal Bulletin sister publication AMM’s latest assessment. 

Although spot market demand has slowed, spot prices continued to buck the summer slowdown trends, allowing suppliers to raise offer prices continually amid tighter supply.

“Material is definitely still tight on high carbon ferro-manganese,” an alloy supplier told AMM. “Sheet mills have been operating at very high rates and they use the most of it, and are using way more than they were forecast.”

Strong levels of consumption have kept supplier inventories thin and some have been unable to offer material outside their contracted volumes.

“We had a couple of enquiries from traders looking to restock, but we declined to offer. We just don’t have enough material to supply the trade at this time,” a second supplier source told AMM.

Meanwhile, traders have been unwilling to assume the risk of replenishing stocks with material from overseas, keeping supply tight and consolidated.

“Replacement costs aren’t attractive enough to entice traders to take a meaningful position in the USA right now, so there is really only a handful of outlets if you need material,” a third supplier told AMM. 

Silico-manganese prices held at 62-65 cents per lb, in warehouse Pittsburgh on July 20, according to AMM’s latest assessment. 

Prices in the USA have been trading at a significant premium to the global markets, limiting further upside opportunity.

“There isn’t an oversupply here, but there isn’t the same kind of tightness on silico-manganese that you see with ferro-manganese, and it is keeping prices at bay,” a supplier source said.

Although spot market activity has largely succumbed to the summer slowdown, one mill was seen making a significant purchase to cover second-half requirements, sources told AMM.

In India, prices also remained flat last week at $1,080-1,130 per tonne, as limited demand left offer prices unchanged. Indian silico-manganese prices had made some gains thanks to ore price positivity in recent weeks, but sources suggested prices had paused last week.

Prices also held in Europe as the summer slow-down there continued. 

Metal Bulletin’s price quotation for silico-manganese delivered in Europe held at €1,040-1,080 per tonne, while ferro-manganese held at €1,200-1,260 per tonne. 

“We are in the middle of the summer and there aren’t many silico- consumers around. It’s the same summer story for ferro-manganese as silico-manganese, but ferro-manganese is high in comparison with silico-manganese,” a manganese alloy producer told Metal Bulletin. 

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