GLOBAL MANGANESE WRAP: Ore strength remains; Indian SiMn ‘on fire’

Manganese ore prices stayed firm in last week’s assessment on positive sentiment for the steel sector, while silico-manganese prices fob India jumped higher as a result of the higher ore quotations.

  • Manganese ore still supported by steel sector and stock dips, despite some bearish indicators
  • Chinese silico-manganese momentum wanes, on and off exchange, but ferro-manganese strengthens
  • Indian silico-manganese ‘on fire’
  • European alloys lose ground
  • US ferro-manganese tight on lack of supply

Manganese ore prices were stable to slightly firmer last week, supported by strong expectations in the steel sector, and reduced stocks in China over the past month.

The 44% manganese ore index climbed 5 cents to $6.11 cif Tianjin per dmtu on Friday September 1, while the 37% index reached $4.60 per dmtu fob Port Elizabeth, up 2 cents from the previous assessment.

Manganese ore has displayed relative strength in recent months, given the time of year, and is now up 14% since June. However, last week’s figures were still 32% lower than their January 2017 highs.

“Manganese ore is stable and demand is strong,” one trader said on Friday.

While traded volumes remained light, likely due to it being a traditional quiet period, most sellers were looking for higher numbers.

“I’ve heard of deals done at [last week’s] index levels, but people are pushing for higher,” a second source outside China said.

Chinese participants agreed that manganese ore trading volumes have been thin, but there has been optimistic sentiment from market participants over the week.

“The spot trading volume at ports is thin as the market is waiting for more tender prices announced from Australian and South African miners for September, while the cif basis price is mostly stable to firmer,” a manganese ore trader in China said.

“Tender prices are expected to rise,” the trader in China added.

On top of this, downstream demand is likely to be supported by news of a fire in China.

“The downstream rebar prices next week are very likely to move upward after a fire broke out at Bengang Blast Furnace. Silico-manganese and manganese ore prices will be supported by rebar prices,” a third trader said.

The No. 1 blast furnace at Northeast China’s Benxi Iron & Steel (Bengang) caught fire at 10:15am on Friday September 1, pushing the most-traded January hot rolled coil (HRC) contract higher, Metal Bulletin reported.

But although the market remained relatively strong and physical demand remains firm, some argued that the recent manganese ore strength has been largely driven by a rally in silico-manganese prices in China, both on and off exchange. With these markets appearing to tail off over the past week, the mood among some in the manganese ore market has turned cautious.

On top of this, exports of ore from South Africa, a major hub, are believed to have increased in recent weeks. These factors could put a ceiling on any rallies, sources said.

“Now South African shipments to China are increasing. Meanwhile Australian shipments to China are comparatively stable,” a manganese ore trader said.

“Customers have reduced their purchasing frequency and are very conservative because South African exports are expected to increase,” a trader said.

“The winter is coming, and people know that if they purchase now it will arrive in the winter, when extra stocks are least needed,” the trader added.

Chinese silico-manganese rally tails off
Chinese silico-manganese price were, meanwhile, unchanged last week, while ferro-manganese prices were stable to higher over the past seven days.

With momentum in the Chinese silico-manganese market appearing to wane, silico-manganese (min 65% Mn max Si) prices in China’s spot market were unchanged at 7,000-7,200 yuan per tonne on September 1.

The market attributed the stable silico-manganese price to a consolidation of previously rallying prices on the Zhengzhou Commodity Exchange (ZCE).

The most-traded silico-manganese price on ZCE closed at 7,318 yuan ($1,115) per tonne on Friday September 1, slightly lower than the previous Friday’s close of 7,362 yuan per tonne.

Chinese ferro-manganese (min 65% Mn max 7% C) prices stood at 6,700-6,800 yuan per tonne on September 1, up from 6,600-6,700 yuan last week.

Market participants cited a low level of available spot ferro-manganese stocks as supportive to this market.

The relative strength in the ore market continued to support Indian silico-manganese prices last week. Indian fob prices hit $1,160-1,200 per tonne, up from $1,140-1,200 a week earlier.

“Silico-manganese prices are on fire right now,” one source in India said. “The continuous increase in prices of manganese ore is pushing the prices higher and higher. Yes, now nothing is offered outright below $1,200 from India. Buyers are readily able to accept deals up to $1,180 fob,” the source told Metal Bulletin.

European alloys weaken
By contrast, alloy prices in Europe weakened last week. Consumers were able to secure material at reduced levels, as sellers were eager to secure volume business as the summer draws to a close.

Silico-manganese prices drifted down to €1,000-1,080 ($1,188-1,283) per tonne on Friday, from €1,020-1,080 a week earlier, with material sold within this range and below it.

“We wanted to get some business done, so we reduced prices, but demand is actually fantastic,” one seller said.

“There are some cheap sellers out there,” one seller who had participated in European alloy tenders said. “I’m not willing to compete in the low €1,000s,” he added.

Ferro-manganese prices in Europe also drifted lower last week, falling to €1,180-1,250 per tonne on Friday September 1, from €1,200-1,260 a week earlier.

Strength in US ferro-manganese
US high-carbon ferro-manganese prices have, meanwhile, strengthened as spot inventories have remained thin.

US spot prices for high-carbon ferro-manganese remained increased to $1,530-1,600 per long ton on August 31, up from $1,520-1,580 per long ton previously, according to Metal Bulletin sister publication AMM’s latest assessment.

Spot market activity improved slightly this week, particularly with regard to traders looking to cover up short positions.

“Traders are caught in a tough place right now trying to meet commitments,” a supplier source said to AMM. “They basically are in a position where they have to pay whatever the suppliers offer if they need to cover quickly.”

Suppliers have been able to continuously elevate prices to traders in these situations.

“The suppliers don’t have a ton of extra material for the spot market right now, so if they are going to offer there, they are going to get their price,” a second supplier source told AMM.

“We aren’t anxious to get rid of any available material we have, so we have been offering at prices that we thought would be too high to get the business, but we keep having success,” a third supplier source explained.

Larger enquiries coming into the market have been met with limited offers, as only a few suppliers have the ability to supply such enquiries at this time.

“We are seeing mills not getting a lot of quotes on larger enquiries, which just shows that there really is not a lot of extra material in the hands of the smaller players. It is all in the hands of the major suppliers,” a fourth supplier source said.

Meanwhile, the US silico-manganese market remained inactive, leaving prices unchanged over the past week. US spot prices for silico-manganese remained level at 61-64 cents per lb on August 31, according to AMM’s latest assessment.

“This market is deader than dead right now. There just aren’t any enquiries out there,” a supplier source said to AMM.

“I expect things will start to heat up after Labor Day [on September 4] activity wise,” a second supplier sources said.

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