Australian manganese ore shipments to China to fall in March, April

The volume of manganese ore delivered from Australia to China is expected to decrease in the coming two months due to the damage at a manganese loading wharf on the island of Groote Eylandt with the impacts of tropical cyclone Megan, Mysteel estimated. Groote Eylandt Mining Company (GEMCO), a major manganese ore producer located on the island of Groote Eylandt in North Australia, had to halt operations since 19 March, and the date for resumption has not been confirmed yet due to the ongoing impact of the bad weather around the island. The manganese miner is jointly owned by South32 (60%) and Anglo American (40%), as reported.

Therefore, GEMCO's shipments of manganese ore are expected to be cancel over late March-April, and shipments for May are also uncertain, according to Mysteel's survey. In 2023, manganese ore shipped from the Groote Eylandt island to China reached 4.18 million tonnes (mnt), accounting for 76.8% of the total volume shipped from Australia to China, Mysteel's survey showed.

Mysteel estimated that manganese ore delivered from Australia to China may register 380,000 tonnes (t) in March, falling by 33% on month or lower by 18.6% on year. With the impacts on manganese ore shipments, market sentiment in China has improved somewhat. Some Chinese traders tried to lift their offering prices of Australia-origin manganese ore, and prices of the ore in domestic physical market have shown some signs of stabilising, Mysteel Global noted.

As of 21 March, the price of Australia-origin 45% grade Mn ore at North China's Tianjin port was assessed by Mysteel at Yuan 36/dmtu ($5/dmtu) including the 13% VAT, reversing up slightly by Yuan 0.2/dmtu on day and ending the weakness since the start of this month. However, considering the high-level inventories of Australia-origin manganese ore at China's major ports, and lower consumption of this ore from downstream manganese alloy smelters, domestic prices of Australia-origin manganese ore still face many pressures to continue the uptrend.

Mysteel's latest weekly survey showed that as of 15 March, inventories of Australia-origin manganese ore at China's major ports totalled 1.25 mnt, rising by 5.7% on month or higher by 24.4% compared with one year ago. In parallel, domestic manganese ore demand from downstream silico manganese smelters is likely to remain weak in near term, as smelters in most production bases, except those in North China's Inner Mongolia, start to cut their silico manganese output or to slow their smelting pace given the sharper losses they suffered with the persistent fall in silico manganese prices, Mysteel Global learned.

Over 8-14 March, daily silico manganese output among the 187 Chinese smelters under Mysteel's regular tracking moved down further to touch a three-month low of 28,500 t/day, down by another 155 t/d from the prior week. The 187 sampled smelters host about 99% of China's silico manganese smelting capacity.

As of 20 March, the national price of 6517 silico manganese under Mysteel's assessment had slipped to Yuan 5,916/t including the 13% VAT, recording the lowest since 1 December, 2020.

Nevertheless, Mysteel estimated that the fall in shipments of Australia-origin manganese ore to China may help to digest the high-level stocks at the country's major ports, and total inventories at the ports may empty at a relatively faster pace in April. These may ease the market pressure to some extent.

For full-year 2023, China's imports of manganese ore totalled 31.4 mnt, among which 5.25 mnt were imported from Australia, according to the statistics from China's General Administration of Customs (GACC).

Note: This article has been written in accordance with an article exchange agreement between BigMint and Mysteel Global.