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Ore prices skyrocket Manganese ore prices skyrocketed last week, as major miners all lifted their offers to China, effectively lifting port spot prices as well.
“Seaborne offers increased this week, traders are willing to buy as current port prices are still higher than the cif level,” said a Tianjin trading source.
Metal Bulletin’s 37% manganese ore index increased to $3.85 per dmtu fob Port Elizabeth on March 31, up 32.8% from $2.90 per dmtu a week earlier.
Meanwhile, Metal Bulletin’s 44% manganese ore index elevated to $5.21 per dmtu cif Tianjin on March 31, up 25.5% from $4.15 per dmtu previously.
“Demand has been limited,” a mining source told Metal Bulletin. “But when the fot numbers came up, people wanted to hold on to their stock. Inventory is in tight hands now.”
A second mining source similarly indicated Chinese sellers are holding inventory, opting to wait for higher prices. “Chinese stockists are holding cargo. They are sitting on it and waiting for the price to rise,” he said to Metal Bulletin.
“The market went from $9 to $3. They’re sitting on stocks valued at both ends of this, so maybe they want to wait until the price goes up before moving,” he added.
Although ore prices have been on the rise, high levels of port stocks have left some market participants expressing caution regarding the potential for the price run to continue.
“Manganese ore may not continue rising due to the Chinese holiday [on April 3-4], especially with stocks now sitting at 3.5 million tonnes. This is the first time in history when the price has rallied with such high stocks,” a third mining source told Metal Bulletin.
Sources also suggested the volatile alloys market may cap further gains as well.
Asian alloys continue to run Silico-manganese smelters continued lifting their offers this week, with prices reaching 6,800-7,000 yuan ($987- 1,016) per tonne in-warehouse China on March 31, up 3.8% from 6,500-6,800 yuan per tonne previously according to Metal Bulletin’s latest assessment.
Market sentiment in China has been cautious due to Hebei Steel’s unsettled April tender. Sources indicated that smelters have been seeking prices above 7,000 yuan per tonne, while Hebei Steel has yet to meet this mark. Market participants estimated that the tender will be closed by this week.
Meanwhile, silico-manganese futures prices exhibited volatility last week, with prices rebounding from early week declines to as high as 7,356 yuan on March 29, before closing at 6,940 yuan per tonne on March 31.
Smelters’ current attitude is if mills’ prices are too low to accept then they are more willing to send their cargo to the exchange, as mills’ payments are through an acceptance draft but payment from the exchange is by cash.
“Hebei Steel and smelters are still in the game due to the participation of silico-manganese futures. No one knows who will win this time,” a Beijing trading source told Metal Bulletin.
“I think we need time to see how much cargo will be delivered to the exchange in May, that’s the key to the market in the near term,” a second trader source in Shanghai said.
Due to the smaller nature of the ferro-manganese market, market participants indicated that the negotiations with Hebei Steel have been less contested. Sources told Metal Bulletin that Hebei Steel has set its purchase price of high carbon ferro-manganese at 6,800 yuan per tonne for April, including delivery and payment via an acceptance draft, much higher than its March price of 5,000 yuan.
Chinese ferro-manganese spot prices also moved up to 6,200-6,600 yuan per tonne on March 31, up 14.3% from 5,500-5,700 yuan per tonne previously, according to Metal Bulletin.
Indian manganese alloys have similarly tracked the manganese ore prices higher, with several sources suggesting that there is a shortage of ore in India.
Indian silico-manganese prices lifted to $980-1,060 per tonne on March 31, up 3.6% from $950-1,020 per tonne previously, according to Metal Bulletin.
“The current market prices for silico-manganese are highly volatile and have been fluctuating due to a shortage of manganese ore,” a trading source told Metal Bulletin.
“There is a fairly wide range on prices at the moment as some producers bought ore when prices of ore were costlier a few weeks ago, and have to offer alloy at a higher price. Indian producers are not holding the stock at this moment therefore the prices are going up,” he added.
Despite the rising prices, market participants indicated that spot market activity has been limited.
“Buying demand is quite thin. Only small volumes are being bought by customers who need prompt material,” a producer source said to Metal Bulletin. US, EU alloys hold firm The US manganese alloys market held steady last week, as limited trading activity within the market kept pricing unchanged.
Spot prices for high-carbon ferro-manganese remained level at $1,380-1450 per gross ton in-warehouse Pittsburgh on March 30, according to Metal Bulletin sister publication AMM’s latest assessment.
“The high carbon ferro-manganese market is very quiet right now, but it is not really weighing on prices at this point,” a supplier source told AMM.
“Inventories are very low, so there really isn’t much potential for prices to move down. There is no pressure on sellers to sell off any cheaper than current levels,” he added.
In addition to low inventory levels, the elevated ore and alloy prices overseas have suppliers hesitant to lower offers at this juncture.
“Now that manganese ore and alloys prices are back on the rise outside of the USA, any correction that was underway has stopped,” a second supplier told AMM. “I think the market wants to see where the global market settles before bringing prices down any further.”
Silico-manganese prices have remained similarly resilient as the global markets have tracked upward along with low-grade ore prices.
US spot prices for silico-manganese held at 65-68 cents per lb on March 30, according to AMM’s latest assessment.
“I honestly don’t see a while lot of pressure yet,” a third supplier source told AMM. “There is talk of people planning to offer forward for the third quarter or second half at lower prices but that isn’t translating into the spot prompt market price.”
Market participants similarly indicated that the trend reversal on ore and silico-manganese prices outside of the USA has slowed the expected fall in US prices.
“The market is probably clouded a bit because of the run up in the futures markets,” the third supplier source noted.
“The whole thing is still very much unsettled, and I think US pricing will hold in place while the global market searches for equilibrium,” he added.
Meanwhile, European silico-manganese spot prices increased slightly to €1,000-1,115 ($1,066-1,189) per tonne on March 31, up 1.4% from 980-1,100 per tonne previously, according to Metal Bulletin.
While sources reported business as high as €1,200 per tonne, most indications were at €1,000-1,050 per tonne.
European ferro-manganese prices held steadily at €1,200-1,275 per tonne on March 31.
Market participants indicated that supply of the material remains tight in Europe, with no indication of any move.
The tight market had many traders and suppliers looking to sell at €1,275 per tonne, although business was transacted as low as €1,200.