By Janie Davies / May 21, 2018 / www.metalbulletin.com /
Article Link
Manganese ore prices fell heavily over week ended Friday May 18, in particular the price for 44% manganese, with sellers accepting the refusal among buyers to pay higher prices.
Price of 44% manganese ore slides by 11.4%Chinese alloy prices soften and inventories tick upwardTop price for Indian silico-manganese dipsEuropean silico-manganese price dropsUS alloys spot demand quiet; lower ore prices threaten market.
Metal Bulletin's
price index for 37% manganese ore cif Tianjin, China, fell on May 18 by $0.28 to $5.94 per dry metric tonne unit (dmtu).
Metal Bulletin's
price index for 37% manganese ore fob Port Elizabeth, South Africa, dropped by $0.29 to $5.30 per dmtu on the same day.
And Metal Bulletin's
price index for 44% manganese ore cif Tianjin, China, slumped $0.84 to $6.55 per dmtu.
"This week has been absolute chaos, with major producers launching more than one round of offers to the same customers," a source at a miner told Metal Bulletin. "Chinese consumers are sticking to their guns, saying they won't pay higher prices."
In response, producers aggressively lowered their offers to ensure sales. Price falls among the 44% manganese ore producers were particularly dramatic.
"Buyers are having a ball, with the major producers competing against each other," another supplier said.
Competition was fierce, with different sellers trying to place volumes all at once.
Demand has been strong and inquiries are rushing in, a supply-side market participant said. "The decline has stopped," he added.
But another market source thought that the market remained bearish. "I still think there is a lot of material available in the market and prices remain very high," this source said. "I think [the price] could fall further but not necessarily at the same pace as this week."
Manganese ore inventories at the ports of Tianjin and Qinzhou were heard to have increased to 2.6-2.9 million tonnes over the week, compared with 2.55-2.9 million tonnes the previous week.
"The silico-manganese prices are very important because they will dictate what happens to ore prices," the source added.
Overall production of steel in China is estimated to drop this year due to strict environmental regulations, so it is natural that consumption of ferro-alloys will decrease, producers of both silico-manganese and ferro-manganese have said.
"Although this [second] quarter is supposed to be peak demand season for manganese alloys, steel mills are being made to cut back their production on stricter environmental regulations, so we are selling less," a bulk alloy producer said.
Metal Bulletin's price quotation for
spot Chinese domestic silico-manganese slumped by 300 yuan per tonne to 6,900-7,200 yuan ($1,084-1,131) per tonne from 7,100-7,500 yuan per tonne a week earlier.
The most-traded June silico-manganese contract price on the Zhengzhou Commodity Exchange (ZCE) closed at 7,564 yuan per tonne on May 19, compared with 7,130 yuan per tonne on May 11.
Metal Bulletin's price quotation for
Chinese domestic ferro-manganese stayed constant at 7,100-7,300 yuan per tonne week-on-week, based on a major producer's tradable levels.
Metal Bulletin's price quotation for
silico-manganese (65% min Mn 16% min Si), fob India dropped $10 on the top-end of its range over the past week to $1,070-1,090 per tonne on May 18. This compares with $1,220-1,230 per tonne in mid-April and from an annual peak of $1,220-1,260 per tonne at the start of March.
Metal Bulletin's price quotation for
silico-manganese (65% min Mn 16% min Si), fob India narrowed downward to $1,070-1,090 per tonne on May 18, down by $10 per tonne at the top end of the range from last week. This compared with $1,220-1,230 per tonne in mid-April.
"Indian alloy producers are working at full capacity... There is surplus capacity in Chhattisgarh, West Bengal and Andhra Pradesh compared with [overall] demand in India," one Indian alloy producer told Metal Bulletin. "Suppliers of Indian silico-manganese are focusing on trade in the domestic market, as well as with other countries in southern Asia."
Indian sources said that the manganese alloys markets will be soft against lower demand in the coming months. One supplier said that he had done a deal for 500-1,000 tonnes of alloy to East Asia, but added that he thought offer prices were lower now.
The more actively traded grade of 60% min Mn, 14% min Si is priced about $100 per tonne lower than its sister grade, with some suppliers quoting prices as low as $930-940 per tonne fob.
Metal Bulletin's European price quotations for
silico-manganese dropped by $10 per tonne to $990-1,040 per tonne delivered, while the price of
high-carbon ferro-manganese was unchanged for a third week at $1,000-1,050 per tonne delivered.
Lower manganese ore prices in recent weeks in Europe, and reduced spot demand after second-quarter settlements, have prompted lower offer prices for silico-manganese.
The European markets were flat for most of the year until mid-April, when weakening ore prices eventually started to drag alloys prices downward. Manganese alloys prices have been on a general downward trend since January last year.
Lower ore prices loom over quiet US market
The high-carbon ferro-manganese market in the United States traded in a tighter range last week, with spot market activity largely limited to small-volume transactions.
US spot prices for high-carbon ferro-manganese were assessed at $1,480-1,550 per long ton on May 17, up by $10 per ton on the low end from $1,470-1,550 per long ton previously, according to American Metal Market's price assessment.
While some mills were seen buying larger tonnages on a formula basis for second-half deliveries, spot sales remained sporadic and involved mostly small volumes.
"The market has been super-quiet over the past week. We have seen inquiries for a truckload here and there, but that is all," a supplier source told AMM.
While some market participants are afraid of declining ore prices weighing down prices in the near term, others suspect the US market will be able to maintain near-current levels.
"The US market is a bit protected, compared with the rest of the world. Given the long lead times involved in bringing alloys over here, and the lack of spot opportunities, not many people are going to take the risk of bringing in a lot of material, even if overseas prices are much lower," a second supplier source explained.
Meanwhile, the US silico-manganese market weakened slightly last week, because lower ore and alloy prices in overseas markets have begun to weigh on prices.
Spot prices for US silico-manganese slipped to $0.65-0.68 per lb on May 17, down by $0.01 from the previous week, according to AMM's price assessment.
Second-half contract negotiations continue, with many expecting them to yield lower prices because of the lower prices available outside the US.
"The gap between US and European prices has been pretty sizeable for a while," a supplier source explained. "It makes sense that we would see prices starting to correct downward here."