GLOBAL MANGANESE WRAP: Ore prices rise again but only USA records alloy strength

Manganese ore prices resumed their upward trend on Friday June 2, with high-grade prices gaining more than 5% amid tight availability.

  • Ore prices back up after pause
  • High-grade ore rises more than 5%
  • Alloys prices hold in China, India and Europe
  • Ferro-manganese prices rise in USA
  • US manganese alloy supply remains tight

Metal Bulletin’s 44% manganese ore index cif Tianjin rose 31 cents to $6.04 per dmtu while the 37% manganese ore index fob Port Elizabeth rose 7 cents to $4.62 per dmtu.

Both indices had dropped a few cents a week previously.

Market participants anticipate higher prices from high-grade producers in the near future while inventories in China contract. 

Manganese ore inventories at the main Chinese ports of Tianjin and Qinzhou stood at 2.85-3.05 million tonnes on May 31, according to Metal Bulletin’s latest survey, down from 3.2-3.3 million tonnes in mid-April.

“High-grade is particularly tight. The truth is it can be sold in one day. Chinese stocks are low – port inventory is below 3 million tonnes,” a producer source told Metal Bulletin. 

While some market participants attributed the strength in the 44% market to strong demand and tight supply, others pointed to the continued influence of traders.

The recent rally in both grades of material and the price differential between port and seaborne cargoes have heightened longstanding speculation that traders are planning another inventory squeeze in Chinese ports, using the gap between seaborne and port prices – the latter remain significantly higher than the former – as an arbitrage opportunity to generate large profits.

“Semi-carbonate (37%) is much more liquid than 44% so if you can get your hands on 44% material you can squeeze the market,” a second producer told Metal Bulletin.

Others market sources pointed out that silico-manganese futures prices on the Zhengzhou Commodity Exchange dropped during the week. Silico-manganese futures prices have been a significant driver of manganese ore prices in recent months, although the reverse has been the case since early in May when ore prices started to drive alloy futures prices.

“The market is still moving up this week. Some deals have been done above $6 and more high-grade ore miners are mulling increases to their offers now,” a trader in China told Metal Bulletin.

“But it’s hard to say where the market will go; it depends on sentiment… silico-manganese futures prices dropped this week, dampening the market mood,” the trader added.

Meanwhile, physical manganese alloy prices were stable in China, India and Europe. The USA was the only region where price increased. 

Metal Bulletin’s domestic Chinese silico-manganese price stands at 6,700-7,000 yuan per tonne, unchanged week-on-week. 

Metal Bulletin’s domestic Chinese ferro-manganese price stands at 6,300-6,500 yuan per tonne, also flat against last week.

In the USA, spot prices for high carbon ferro-manganese rose for the fourth consecutive week, reaching a seven-year high of $1,440-1,480 per long ton on June 1, up from $1,430-1,480 per long ton previously, according to Metal Bulletin sister publication AMM’s latest assessment.

A tight market remains the driving force behind price increases, leaving some market participants short and seeking to cover.

“Everyone in the USA is tight on high carbon ferro-manganese, especially due to the lack of imports,” a supplier source told AMM. “There have been a number of traders and suppliers who have found themselves short and are scrambling for material at higher prices.”

Market participants expressed optimism about the price strength because suppliers have secured better-than-expected prices at the start of contract negotiations for the third quarter and the second half.

“We’ve seen some surprisingly high prices, which is another sign that there is not much material out there,” a second supplier source said.

While market participants indicated that there is more upward pressure on high carbon ferro-manganese at present, US spot prices for silico-manganese held firm at 65-68 cents per lb on June 1, according to AMM.

“High carbon ferro-manganese is definitely tighter at the moment in the USA, but it’s not like there is a ton of excess silico-manganese floating around in the market either,” a silico-manganese supplier source told AMM. 

Metal Bulletin’s price quotation for Indian silico-manganese held at $1,080-1,125 per tonne fob but sellers are mulling higher offer prices because ore price increases are pushing up their raw material costs.

“Business has been taking place at $1,085-1,090 but our next target is $1,125-1,130,” one seller said. “People took lessons from the last price rise and fall in manganese ore. They don’t want exposure at this level so they haven’t been buying as much ore, which means less silico-manganese production.”

In Europe, prices for silico-manganese and ferro-manganese were stable last week amid limited spot trading. 

Metal Bulletin’s price quotation for silico-manganese in Europe held at €1,100-1,150 per tonne delivered while the quotation for high carbon ferro-manganese rolled over at €1,200-1,280 per tonne delivered.

Although spot material, on which the Metal Bulletin price is based, was trading in a similar range week-on-week, some silico-manganese deals for forward delivery were confirmed below the current range.

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