Manganese seen steady after last week’s sharp drop
Hlengiwe Motaung
Global manganese prices are expected to trade in a tight range this week, taking a breather after a sharp 20% drop in high-grade ore the previous week.
“The market already fell after Eramet cut their price, so I don’t see any other news out this week that will influence the market as much as Eramet did,” a trader said.
Eramet Comilog last week cut its monthly export price for manganese 44.5% Gabonese lump to $3.95/dmtu CIF China for November cargoes, down 21% from October.
As a result, the high-grade manganese ore market tumbled on Friday to $3.91/dmtu CIF Tianjin, down 20%, from $4.91/dmtu CIF in the previous week.
Semi-carbonate prices edged down to $3.69/dmtu CIF Tianjin, from $3.73/dmtu CIF in the previous week. On an FOB basis, semi-carbonate prices eased to $2.94/dmtu FOB Port Elizabeth from $2.98/dmtu previously.
Weak demand from ferroalloys producers in China and India are the main driver behind the falling market. A manganese trader said stocks at the Tianjin port were at a record high near 7 mt.
The weak market has forced many South African producers to cut back on their exports, particularly shipments trucked to ports.
However, one major South African manganese producer said it needed to keep production going because of their “take or pay” commitments with rail operator Transnet.
“We are struggling to place our Nov cargoes in China. We only have verbal confirmation from a few buyers, nothing firm,” said the producer, which sells semi carbonate and 42% manganese lump to China.
Additionally, the cost of mining in South Africa remains a challenge.
“We are at around $2.80/dmtu cost wise and are already loss making on our semi-carbonate material,” said the producer.
On average, South African mining are costs are $2.50/dmtu and market sources say “the minute FOB breaches $3.00/dmtu, producers start feeling the pinch. This is also exacerbated by the strengthening rand,” he said.
This week, 233,000 t of manganese will be shipped from Port Elizabeth starting with a 66,000 t VELOS ONYX, which is set to exit from the port’s break bulk terminal.
The port of Saldanha will only start receiving cargo by rail from 18 October after a 10-day maintenance shutdown on the Ore Line.
Producers hope that with volume cuts and rail constraints, “the price will at the very least hold”.
In India, offers for imported manganese ore moved on similar lines. “I understand suppliers of imported ore have not yet reduced offers and will likely wait for a few days to give offers,” said an official of a manganese alloys producer.
There were no confirmed offers for high-grade material heard for India, against the previous week’s range of $5.00-5.10/dmtu.
However, a few offers for semi-carbonate grades of 36% content were heard at $3.85/dmtu CIF Vizag, while those for 32-34% content were heard at around $3.60/dmtu.
Meanwhile, India’s largest manganese ore miner, MOIL, shared its production and sales figures for the month of September at 146,000 t and 159,000 t, respectively. Production in September was up 8% year on year, from 135,000 t, while sales rose 2% year on year from 156,000 t.
April-September production of 870,000 t was up 7% year on year, while sales were nearly unchanged at 751,000 t.
“Despite continued rainfall, the upward trend in production in April-September has been heartening. MOIL team is geared up to achieve higher levels of production and sales in the coming months,” its Chairman and Managing Director Ajit Kumar Saxena said.