High-grade manganese rally ends with 33% weekly drop
High-grade manganese prices tumbled 33% in one week, ending a four-month rally, as the market finally capitulated under weak demand and pressure from lower grade material.
High-grade manganese ore dropped to $6.02/dmtu CIF Tianjin on Friday, compared to $8.97/dmtu in the previous week and the lowest since late April.
The drop reflects Eramet Comilog’s decision to set its price of Mn 44.5% Gabonese lump at $6.00/dmtu CIF China for September cargoes, and the price of 43% grade of Gabonese chips at $5.80/dmtu CIF China.
“Unless there is a demand correction driven by steel, I don’t see a sustainable increase in prices, as alloy prices are under pressure due to weak demand and high alloy stocks. If steel demand, reduced ore exports and electricity supply don’t improve prices will be under pressure in Q4 & Q1,” a South African manganese producer said.
Last week, United Manganese of Kalahari (UMK) also cut its September price of 36% grade South African semi-carbonate lump to $3.80/dmtu CIF China.
As a result, 36.5% grade semi-carbonate lump prices fell to $3.03/dmtu FOB Port Elizabeth on Friday, from $3.38/dmtu FOB a week ago. On a delivered basis, the 36.5% price fell to $3.87/dmtu CIF Tianjin from $4.14/dmtu.
The semi-carbonate markets have now erased all gains from the halt of South32’s GEMCO exports in mid-March. Manganese ore prices have come under pressure from weak demand, as ferroalloys producers struggle with easing steel consumption, especially in China.
In India, some producers have been forced to significantly cut output due to the current price environment.
Offers in India for high-grades of imported manganese ore were heard in a range of $6.00-6.15/dmtu CIF Vizag during the week. This was a sharp drop from offers of around $9.00/t CIF Vizag in the previous week.
Offers for semi-carbonate grades were heard at around $3.90-4.00/dmtu CIF Vizag, down from the previous week’s offers in the range of $4.15-4.25/dmtu.
“Offers for imported manganese ore into India can come down sharply in the coming days due to higher stocks at ports and a softness prevailing in domestic and export prices of ferroalloys,” said an official of a steel company.
Stocks of imported manganese ore have jumped sharply over the past week due to a surge in vessel arrivals, according to market sources.
Visakhapatnam Port Trust (VPT), which handles the maximum tonnages of imported manganese into India, set a record in handling manganese ore vessels in July.
The port said it discharged 566,301 t of manganese ore in July. This surpassed its previous record in May when it discharged 437,270 t of manganese ore.