Manganese market poised for possible increase

[visualizer id=”6914″] As of March 15th, the price of manganese ore was stable, but some increases are noted to prices for April delivery, suggesting that producers anticipate rising demand. However, according to Core Consultants’ latest manganese report, there are numerous manganese ore projects in development, and with the first seabed recoveries expected to take place this year, supply will not struggle to keep pace. As such, we expect prices to remain stable in the immediate term.

In South Africa, load shedding continues to affect the Energy Intensive User Groups (IUGs). Mine workers are unable to go underground when the electricity supply is unstable and smelters are not able to be turned on and off so quickly. As such, many producers are opting to suspend operations. However inventories at Chinese ports of both alloy and ore is relatively high, with ore standing at above 3.1m tonnes, which is expected to offset a possible slowdown in South Africa’s supply in the short term.

The price increases noted for April delivery suggest a confident market, but we caution that raw material supply high and appears to be increasing. While demand is sufficient to buoy manganese prices and the risk to consumption from alloy producers is minimal, slowdowns are noted throughout the crude steel industry for the trailing quarter, posing the risk that high inventories of ores and alloys could result in a price correction coming into Q3.

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Lara Smith

Lara is the CEO and founder of Core Consultants. She has been an analyst for over thirteen years and has focused on commodity markets for just over a decade. She began her career as a buy-side analyst at Foord Asset Management in Cape Town, before taking a Head of Research role at a mining corporate finance and investment firm.

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