S.Africa’s manganese market oversupplied – Kudumane CEO

South Africa’s manganese market is oversupplied, and producers should more closely follow demand signals, as semi-carbonate prices tumble from this year’s highs, said Kudumane’s CEO.

During a McCloskey manganese webinar last week, Kudumane CEO Thembelani Gantsho said the recent drop in semi-carbonate manganese ore prices indicated that demand fundamentals were not there to support such levels.

“I think South Africa ore is in oversupply,” he said. “There is a need from producers to exercise some restraint in order to keep some stability within the market.”

The semi-carbonate 36.5% price has fallen sharply over the past few weeks, dropping to $3.62/dmtu FOB Port Elizabeth last Friday, down 35% from this year’s high of $5.55/dmtu reached in mid-June.

The market surged in mid-June from just above $3.00/dmtu following the shutdown of South32’s Groote Eylandt (GEMCO) mine in Australia, the world’s second largest. GEMCO halted exports due to damage from Cyclone Meghan and doesn’t expect to return to the seaborne market until January-March 2025.

The run-up in prices prompted South African producers, as well as those from Gabon, Ghana and other countries, to step up their exports to take advantage of the high prices. This was after a relatively poor price environment in the second of 2023 that forced some to cut back on production.

“Those producers who took advantage of the high prices did so as it was viable. I think the status quo will return,” Gantsho said.

“Those that were not producing given where the prices were in the beginning of the year will probably go into care and maintenance again. If producers exercise some restraint, hopefully we can see some improvement.”