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Metal Bulletin’s 37% manganese ore index, fob Port Elizabeth rose 48 cents to $2.90 per dmtu.
Metal Bulletin’s 44% manganese ore index, cif Tianjin rose 13 cents to $4.15 per dmtu. Silico-manganese futures prices in China, which trade on the Zhengzhou Commodity Exchange, have been volatile in recent weeks, recording huge gains before peaking and falling back last week.
Manganese ore prices have tracked the rally, which, while being driven by speculation not fundamentals, indicates higher prices for physical silico-manganese further out, which would increase demand for ore and drag up ore prices.
South African manganese miners have also raised their dollar-dominated offers in line with the stronger rand, to avoid losing out when converting back to rand, a producer source told Metal Bulletin.
“The futures volatility and effect on manganese ore is crazy but the stronger rand is also at play,” the source said.
So far, the pullback in silico-manganese prices on the exchange has not dampened the increase in ore prices, but offers have decreased as market participants await stronger signals.
“Enquiries noticeably decreased this week. We have held our offers [in the spot port market] for the time being and we are waiting to see major mills’ April purchase prices for silico-manganese, which may be announced by next week or so,” a second trader said.
The unexpected ore price increase of recent weeks, and the uncertainty around the speculative influence of the futures pricing, have raised problems for consumers – manganese alloy smelters – as well as miners.
Indian silico-manganese producers had been waiting for ore prices to find a floor before buying and have been caught out without material, one market source told Metal Bulletin.
“The futures prices rallied on speculative trading, but physically on the ore side, there’s very little business. There’s lots of demand, but no major offers,” the source said.
“Indians are now getting caught short on ore; these silico-manganese futures have been causing serious issues as the Indians had waited and waited to buy ore. This whole thing caught people by surprise. Prices were falling and all of a sudden, there’s this speculative futures demand,” he said.
“How do we price the ore? We don’t want to hurt consumers of this ore when demand is up due to speculative demand,” he added.
Physical silico-manganese prices in China held at 6,500-6,800 yuan ($944-988) per tonne, in warehouse on Friday but Indian silico-manganese prices tracked ore prices higher.
Metal Bulletin’s quotation for silico-manganese prices, fob India rose to $950-1,020 per tonne up from $945-985 per tonne on March 17.
Indian producers that did buy ore have done so at the latest higher prices and are already passing on those costs by raising offer prices for silico-manganese, a market source in India told Metal Bulletin.
“We were at the Metal Bulletin Asian Ferro-Alloys Conference in Hong Kong [last week] and there was definitely strength during that period. It was confirmed by many traders and producers that the prices of silico-manganese [65% Mn, 16% Si] have touched $1,000 [per tonne] fob, and some deals have already been done there,” a second market source in India told Metal Bulletin.
Buyer resistance puts pressure on US prices Manganese alloy prices mainly slipped lower in the USA and Europe.
Silico-manganese prices in warehouse Pittsburgh remained flat at 65-68 cents per lb on Thursday March 23. High-carbon ferro-manganese prices in the USA dropped to $1,380-1,450 per gross ton in warehouse Pittsburgh on March 23, down from $1,400-1,475 per gross ton previously, according to Metal Bulletin sister publication AMM’s assessment.
“We continue to see a lot of resistance in terms of pricing on manganese alloys in the USA. We are seeing a little bit of softness, but nothing major,” a market source told AMM.
Continued supply tightness in the USA, especially for ferro-manganese, means there is limited scope for downward price correction, other sources pointed out.
“There really is not much discernible pressure on the market, because the inventories aren’t really there,” a second supplier source said.
Market participants are keeping a watchful eye ahead of the anticipated sale of ferro-manganese by the Defence Logistics Agency (DLA) as it may serve to shift that balance.
“The real wild card is that we don’t know what will happen with the DLA at this point,” the second supplier said.
“However, I don’t think many will want to buy it. The DLA won’t want to sell at a low number, and traders have no real sale-side liquidity, so they are not going to want to take the risk,” the source added.
Sources suspect one of the major suppliers will end up securing the material to maintain pricing influence in the market.
In Europe, prices for silico-manganese dipped on Friday, while ferro-manganese were unchanged.
Silico-manganese prices dropped to €985-1,100 ($1,064-1,188) per tonne on a delivered basis from €1,000-1,120 per tonne previously. Ferro-manganese prices held at €1,200-1,275 per tonne, delivered.