GLOBAL MANGANESE WRAP: Ore prices rise after slow start; big jump in customers seen
Manganese ore prices climbed last week, driven by improved sentiment in China due to higher silico-manganese futures prices and ore port prices.
Prices started the week at slightly deflated levels after falls in the previous week but sentiment soon shifted and buyers looked to secure units.
“We noted a positive mood around Tuesday so we offered higher and got a bid in the mid-$4s,” a producer source told Metal Bulletin.
“We’re holding off because when the manganese ore price moves it moves a lot. It’s not normally a 5-cent move. It’s normally 5% so we’re in no rush to sell,” the producer added.
Traders in China raised their offers on spot port manganese ore after seeing the climb in the futures price as well as in the hope of pushing up port ore prices.
“Silico-manganese futures have triggered this. So far, the level of physical demand is not as high as the futures but it’s the futures everyone is talking about,” a second producer source told Metal Bulletin.
The most-traded September silico-manganese contract on the Zhengzhou Commodity Exchange finished the week at 6,376 yuan ($923) per tonne on Friday April 28, up from last Friday’s closing level of 5,932 yuan.
Given higher futures prices as well as increased ore prices from ports, smelters also returned to the market to buy.
“As soon as the price goes up, all the end-consumers are in the market. When the price goes up, you get a five-fold increase in customers,” a third producer source told Metal Bulletin.
Chinese alloy prices diverge
Simultaneously, smelters also raised their silico-manganese offers to reflect major mills starting their May tenders for the alloys.
On Friday, Metal Bulletin assessed the silico-manganese price in China at 6,500-6,800 yuan per tonne, up 300-400 yuan from a week earlier.
The latest tender price from China’s largest steel mill, Hebei Steel, was pegged at 6,800 yuan per tonne for May delivery, down from its April level of 6,800-6,900 yuan but much higher from the mill’s initial offer level of 6450 yuan, market sources claimed.
The mill’s ferro-manganese price was estimated at 6,300 yuan per tonne, down 200 yuan from its April figure, sources said. HBIS has not yet publicly disclosed its tender prices.
“We’re all waiting for Hebei Steel to understand real physical demand,” a fourth producer source told Metal Bulletin.
Metal Bulletin’s ferro-manganese price in China was 6,200-6,400 yuan per tonne on April 28, down 100 yuan week-on-week.
EU, Indian alloys maintain stability
Manganese alloy prices were stable in Europe and India, with slight tightness persisting.
“I don’t think there’s much stock of any alloy in Europe around, so I wouldn’t be worrying about how to liquidate stocks right now,” a European trading source told Metal Bulletin.
Silico-manganese prices were flat at €1,040-1,115 delivered on a European basis on April 28, according to Metal Bulletin’s latest assessment.
Ferro-manganese prices held at €1,200-1,280 delivered on a European basis on April 28, according to Metal Bulletin.
Spot activity has been limited while market participants await the forthcoming negotiations for the third quarter.
“It’s getting to the summer but people need to stock up for Q3 and that should happen from the middle of May,” the trader added.
In India, prices held firm at $1,040-1,110 fob on April 28, according to Metal Bulletin.
“There are a lot of enquiries and the market seems tight at the moment,” an Indian trading source told Metal Bulletin.
US market dormant
The US market has fallen dormant – spot market activity has entered a lull period.
But despite the lack of activity, spot prices for manganese alloys have yet to show evidence of downward pressure.
US spot prices for high-carbon ferro-manganese held steady at $1,380-1430 per long ton on April 27, according to Metal Bulletin sister publication AMM’s latest assessment.
Meanwhile, US spot prices for silico-manganese remained at 65-68 cents per lb on April 27, according to AMM.
Spot activity has been scant while market participants await mill requests for quotation for the third quarter, which are expected to come in the weeks ahead.
“The market is very quiet right now for both manganese alloys,” a supplier source told AMM. “We are still a couple weeks away from seeing mills coming out for the third quarter, so it should remain pretty dead until that time.”
One large mill has entered the market for the second half for silico-manganese, market participants noted, but negotiations are not expected to be settled for several weeks.
“This is normal procedure when the mill comes in this early… negotiations could go on for two months. I don’t see it being settled any time soon,” a second supplier source told AMM.
Market participants expect pricing to hold strong in the USA throughout these negotiations while supply remains tight.
“We just started putting together forward offers for the third quarter and the second half, and our offers are very in line with current market conditions,” a third supplier source said. “We really don’t see any weakness on the horizon given the current state of global alloy pricing.”