China's manganese ore prices slide to 6-mth low

Thin sales led Chinese prices of manganese ore to continue weakening this week, with the price of South Africa-origin 36.5% grade Mn ore at North China's Tianjin port under Mysteel's assessment falling to a six-month low of Yuan 33/dmtu ($4.8/dmtu) including the 13% VAT as of March 22, down another Yuan 0.5/dmtu from one week before.

Transactions of this ore in the physical market were scarce this week, as poor profit margins led many manganese alloy smelters to prefer only to purchase ore for their immediate needs rather than accumulate stocks, Mysteel Global learned.

Mysteel's latest weekly survey showed that total inventories of manganese ore at China's major ports were at 6.12 million tonnes as of March 17, higher by 10,000 tonnes from the previous week.

China's silicomanganese prices also softened recently, driven down by the weakness in the domestic ferrous market. As of March 22, the national price of 6517 SiMn was assessed by Mysteel at Yuan 7,253/t including the 13% VAT, losing another Yuan 36/t on week.

On Wednesday, the most-traded SiMn futures contract on the Zhengzhou Futures Exchange for May delivery closed the daytime trading session at Yuan 7,276/t, lower by Yuan 62/t from the settlement price on March 15, the exchange's data showed.

However, many domestic SiMn smelters continued to keep their production high, especially those in North China's Inner Mongolia where smelting costs are relatively lower, with the result that SiMn prices came under more pressure.

"Some SiMn smelters are calling for a reduction in output (of this ferroalloy) to ease the mismatch between supply and demand and to prevent prices from falling further," a market watcher in Shanghai said.

The decline in Chinese manganese ore prices is unlikely to end anytime soon, though, given the limited new orders from smelters. On the other hand, some traders are unwilling to concede more in their sales prices considering their higher import costs, Mysteel Global noted.

Written by Nancy Zheng, zhengmm@mysteel.com

Edited by Zhenqi Yang, yangzhenqi@mysteel.com

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