China: Seaborne Manganese Ore prices expected to drop further

Due to the evident high inventory at Tianjin port, the downstream users are inclined to demand a lower price for Manganese ore purchase out of market pressure. Some Manganese ore sellers are willing to clinch deals at lowered port spot offers. At present, the port offer for South African semi-carbonate lump Mn36-37% is at RMB 35.5-36/dmtu (USD 5.05-5.12/dmtu); Gabon lump 45% at RMB36-37 (USD 5.12-5.26)/dmtu, Australia lump Mn46% at RMB38-40/dmtu(USD 5.40-569/dmtu). The transactions on Manganese ores are sluggish given the fact that the downstream industry holds a hesitant attitude for purchase while Manganese ore traders opt to prop up prices. The inventory at Qinzhou port saw notable rundown with most resources under a handful of holders and incoming manganese ores are not much, which led to a rise in sentiments to prop up price and temporarily hold back offering at a low position. On the other hand, the market operation is stable on the whole and Manganese alloy plants hold a relatively high level of inventory resulting in cautious stance and fewer incentives for purchase.

This week, the transactions of Manganese ore is slow-paced and mainstream offers at Tianjin port faltered RMB 0.5-1.0/dmtu. Although the current spot price of manganese ore is still in a low position compared with oversea offers, it is somewhat corrected from the mid-November period. Considering factors at play such as inventory level, alloy price/inventory and incoming ores to ports, ore traders are adapted to the current situation. Thus, traders are more active in seeking sales though the mill tenders on alloy are yet to be unveiled.

Silico Manganese:
The current market is featured with the following points
1. Mn ore slightly faltered
2. Purchase of alloys by mills are of slow-paced and flagship mills neither from North nor South are yet to confirm a new round of tenders
3. Alloy inventories are on the rise
4. Transactions struggle
Under the interaction of multiple factors, the Silico Manganese market price, though temporarily stand at RMB 5,800-5,900/MT (USD 825-839/MT), the actual price falls on RMB5,750-5,850 (USD 818-832) out of weakened position in pursuing more transactions. However, as the tenders are yet to show the roadmap, and the high cost of alloy leaves limited downward change in alloy price, bringing the current market to temporary stabilization. The cautious stance by downstream in this horn-locked situation is unlikely to see significantly improve in Silico Manganese transactions before confirmation of tenders.

Ferro Manganese:
The mainstream offers on HC Ferro Manganese is centered around RMB 5,400-5,500/MT (USD 768-782/MT) with sluggish transactions. The reasons behind this are weak Manganese ore market and its correlated products as well as sparse purchase enquiries from the down-stream market under the backdrop of slightly down mill prices.

Though opinions on December tenders divide, the overall expectation is hard to be optimistic and the possibility of a slight decrease or remaining stable stands reasonable.