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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