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Manganese stocks at Chinese ports as of the 24th of November increased from the previous month to 2.47m tonnes compared to 2.26m tonnes on the 27th of October. However, if we compare this to the start of the third quarter, we note that overall stocks are a lot tighter. Chinese authorities gave the order in the middle of October for smelters to reduce output by 50% so as to curb pollution; we have previously cautioned that this scenario could lead to a buildup of manganese ore stocks at the ports and a weaker outlook, which has so far held true.

In October and November, ore giants raised their offer prices and left traders struggling to close deals for November delivery, but this has been reversed for December with slight reductions across the board, excepting UMK’s 37% semi-carbonate material which remains at November’s price of $5.65/dmtu due to short supply. Still, however, it is widely reported that downstream interest is extremely low.

For December, Camilog have decreased prices of their Gabon lumpy grade 44-45% material by $0.25/dmtu to $6.25/dmtu, and their particle material by $0.15/dmtu to $6.05/dmtu, whereas UMK’s 37% semi-carbonate material remains at $5.65/dmtu for December delivery.  Although prices has kept somewhat stable, we expect the negative price run to continue as ferroalloy prices remain on the decline.

With respect to steel markets, the US has imposed massive anti-dumping duties on Russia of almost 800% in a further bid to tackle issues related to oversupply. Turkey has also instigated anti-dumping measures against China, where steel production continues to be scaled back moving into winter.

Many smelters in China have scaled back output this month, with some warning that complete shutdowns are not too far away. Industry insiders say that prices should not decline much further since steel production remains profitable, although the price of high carbon FeMn could drop below RMB6,000/tonne ($923/tonne) during December.

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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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