Manganese stocks at Chinese ports as of the 19th of September stood at 2.27m tonnes compared to 3.13 m tonnes last month. This period of destocking has buoyed ore prices, which are expected to remain high over the next two months as restocking commences.
Moreover, steel mills are expected to cut production in October/November as the Chinese Communist Party is hosting its 19th National Congress and the environmental controls during the Congress are generally very stringent. The Congress is also expected to affect the discharge of manganese ore at the Tianjin Port. Consequently, lower volumes are expected to be imported, which will affect the price.
Looking at prices, most ore giants have raised prices for October delivery. Camilog have increased prices by $0.35/dmtu for 44-45% Gabon lumpy and 43% particle grade ore. The largest increase was by South 32’s South African 37.5% lumpy ore, which increased prices for October delivery by $0.65/dmtu to $5.75/dmtu.
A look at the ferroalloy market; SiMn prices in China during September continued to increase from last month. However, we feel that this may be considered too rich mainly since presently relatively few transactions are being concluded at the higher end of RMB8,000/tonne ($1,159/tonne) and secondly while downstream demand is expected to remain robust, few end users are expected to accept these prices.
Similarly, ferromanganese prices across all regions have risen in September compared to August. The fourth quarter is usually a period of restocking and stronger demand following the end of the summer period. As such prices are expected to remain elevated in October.
Spurring demand is the perpetual increase in steel production. World Steel Association (WSA) reported that crude steel production in August was 143.6m tonnes, representing a 6.3% increase compared to August 2016, but down slightly from July’s 147m tonnes.
Production from most of Europe’s steel-producing countries has risen and the merger between ThyssenKrupp and Tata Steel has created the second largest steel company in the world. The link to India is expected to result in an increase of Indian exports to Europe.
Extracted from Core Consultants’ Monthly Manganese Report. Click the link for further details or to subscribe