China's Manganese Ore Stocks Empty Further to 7.5 Month Low

Total stocks of manganese ore at China's six main ports have declined steadily over the past month to reach a 7.5-month low as of May 15, mainly due to reduced arrivals of ore carriers under the impact of COVID-19 globally and the steady consumption of ore among domestic silicomanganese smelters, Mysteel Global learned.

As of May 15, the tonnage sitting at the ports had fallen for a fourth straight week to 4.05 MnT, down 479,000 MT on month and lower by almost a million tonne from the record high on February 7, making for the lowest since last October, according to Mysteel's database.

"The continued digestion of manganese ore stocks (at China's major ports) was within market expectations as arrivals from South Africa had declined substantially over April-May because of the pandemic. This forced some domestic Silico Manganese smelters to purchase some manganese ore from ports," a market watcher in Shanghai said.

The South African government enforced a nationwide lockdown starting from March 26 till the end of April, and both manganese ore mining and port operations in the country had been affected during that period. Chinese ports are likely to receive resumed shipments of South African manganese ore in late June or July, as Mysteel Global reported.

Besides, China's consumption of manganese ore also increased with the recovery in domestic Silico Manganese output, Mysteel Global notes. For April, China's Silico Manganese output reached 827,235 MT, increasing by 61,525 MT from the 13-month low in March, or up 3,687 MT on year, according to Mysteel's latest monthly survey among the country's 121 major Silico Manganese smelters which host almost all the country's Silico Manganese capacity.

The decline in manganese ore stocks at the main ports is seen continuing, as the pace of loading and shipping from South Africa remains slow for the time being given the manpower shortages, though the restrictions on transport including road and rail transport were eased from May 1. Meanwhile, manganese ore imports from Gabon and Brazil are expected to be affected in the coming term because of uncertainties in shipments with the spread of COVID-19 in both countries.

Recently, China's manganese ore prices stayed high under the support of lower supply, despite some retreat. As of May 19, the price index for South Africa-origin 36.5% grade manganese ore at North China's Tianjin port was at Yuan 51.68/dmtu (USD 7.3/dmtu) including the 13% VAT, down Yuan 1.4/dmtu on week but Yuan 6.18/dmtu higher on year, Mysteel's data showed.

(This article has been published under the article exchange agreement between SteelMint Research and Mysteel Global.)