Semi-carbonate manganese ore prices also inched down, with increased liquidity at lower transaction values.
At the same time, port-side prices of high-grade manganese ore in China fell on inactive bookings from smelters which are mainly running at losses, according to sources. The port-side price of semi-carbonate manganese ore softened gently, on high port stocks.
Seaborne
High-grade manganese ore prices dropped substantially during the week to August 16, with offers falling due to the difficult downstream market.
Fastmarkets calculated its manganese ore high grade index, cif Tianjin, at $6.02 per dry metric tonne unit (dmtu) on August 16, a sharp drop of $2.95 per dmtu (32.89%) from $8.97 per dmtu on August 9.
Offers were reported at $6.00 per dmtu, compared to reported offers at $9.00 per dmtu during the previous pricing session.
The index was generally on upward trajectory from April, following the suspension of GEMCO’s Australian manganese ore operations after tropical cyclone Megan made landfall on March 18.
Sell-side sources said buying activity had been limited in general, and offers were adjusted during the week, after it became clear that buyers were no longer willing to accept higher levels.
“I’m not surprised to see it down,” a seller said. “Buyers basically said they’re not agreeing to [higher offers] and they weren’t going to buy anything.”
Buyers’ hesitancy worsened after Hebei Steel cut its August alloy tender price, according to sources.
Hebei Steel, one of the leading steelmakers in China, on August 14 announced an initial 6,100 yuan ($851) per tonne tender price for August-delivery silico-manganese, which is 1,550 yuan lower than July’s tender price.
“The demand situation isn’t strong,” the first seller contact said. “I see steel prices keep weakening and rebar production keeps declining. On alloy production, we see cuts in some smelters.”
According to National Bureau of Statistics, China produced 15.645 million tonnes of rebar in July, a fall of 4.31 million tonnes (21.6%) from last July’s 19.955 million tonnes.
Prices also fell further in the semi-carbonate market, albeit to a lesser extent, with the seller suggesting the lower prices had begun to attract more buying interest, although some sellers may be willing to hold onto material in the short term.
Fastmarkets’ weekly manganese ore semi carbonate index, 36.5% Mn, cif Tianjin, was calculated at $3.87 per dmtu on August 16, down by 27 cents per dmtu from $4.14 per dmtu on August 9.
The index has fallen for consecutive 10 weeks from June 14’s $6.20 per dmtu due to bearish sentiment from buyers and high port stocks, according to sources.
“I think psychologically, [at these prices], it’s leading to a little more liquidity,” a sell-side source said. “[Some sellers] are anticipating that the bottom is not far away, if not already [there]. They’re prepared to sit on cargoes for a month or two or three.”
Four small-sized deals and one large-sized deal were reported at $3.90 per dmtu.
One small-sized deal and one large-sized deal were reported at $3.80 per dmtu.
Fastmarkets’ manganese ore semi carbonate index, 36.5% Mn, fob Port Elizabeth, was calculated at $3.03 per dmtu on August 16, a week-on-week fall of 35 cents from $3.38 per dmtu.
Port-side
Prices of high-grade manganese ore in China’s port-side market fell on inactive bookings from smelters and reduced demand amid production cutbacks in smelters, sources told Fastmarkets.
Fastmarkets’ calculated its manganese ore high grade port index, fot Tianjin China, at 49.50 yuan per dmtu on August 16, a fall of 6.20 yuan per dmtu from 55.70 yuan per dmtu on August 9.
“Most smelters are seeing losses,” a port seller source said. “And one of the approaches to reduce cost is to lower the blend of high grade manganese ore.”
In addition, the demand for manganese ore was falling due to some smelters’ production cutbacks, according to sources.
“Bookings are especially inactive for Southern China manganese alloy producers,” a second seller source said. “I can understand that, because they are hardly surviving in the face of high manganese ore costs and falling alloy prices.”
Prices of semi-carbonate manganese ore were down slightly, amid high availability of the materials at the ports.
Fastmarkets’ weekly manganese ore semi carbonate port index, 36.5% Mn, fot Tianjin China, was calculated at 35.50 yuan per dmtu on August 16, down by 0.70 yuan per dmtu from 36.20 yuan per dmtu on August 9.
Fastmarkets’ assessments of manganese ore stocks at Qinzhou and Tianjin ports were in the range of 5.25-5.43 million tonnes on August 19, compared to 4.78-4.99 million tonnes on August 12.
Alloy
Prices of silico-manganese fell further due to reduced demand from steelmakers, sources told Fastmarkets.
Fastmarkets’ weekly assessment for silico-manganese 65% Mn min, max 17% Si, in-whs China, was 6,000-6,300 yuan per tonne on August 16, down from 6,200-6,400 yuan per tonne on August 9.
Sentiment among alloy participants was quite bearish, with falling tender price offers and production cutbacks in steelmakers.
“The output cutbacks in steel are much bigger than those for alloy,” a silico-manganese trader source said. “So, the oversupply of alloy remains.”
NBS data showed that China’s crude steel production was 82.94 million tonnes in July, down by 9% year on year and by 9% month on month.
Meanwhile, the futures contract of silico-manganese, traded in Zhengzhou Commodity Exchange, fell, following the reduced offers of high grade manganese ore from seaborne market, according to sources.
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