Seaborne Manganese Ore Prices to Go Up on Lockdown in Major Producing Regions

The Coronavirus pandemic has shut down a significant part of the Manganese ore supply when the Iron and Steel industry in China is back in operation. China is ramping up and heavily investing in infrastructure projects to boost the economic slowdown faced due to Covid-19. The major producing country South Africa is going through the 21 days lockdown and all mining operations have been suspended. Meanwhile, another major producer, Australia is going through internal lockdowns as well.

 

South Africa:
The lockdown of three weeks was declared by President Ramaphosa on 25th March, but experts believe that as the situation worsens in Europe, there is a high probability that the lockdown may extend. South Africa exports approximately 1.7MnT Manganese ore monthly, which also accounts to be the highest amongst all the Manganese ore suppliers in the global market. This closure will definitely deplete the in-hand stock at the Chinese ports and will trigger a supply shortage in the coming days, boosting the Manganese Ore prices.
Tshipi Borwa mines, located in the Kalahari Manganese Field, produces approximately 3-3.6 MnT Manganese Ore per year, making it the largest manganese ore mine in South Africa has decided to halt mining activities. Having flexible arrangements contractors and therefore have the privilege of shutting the mine without losses and can take benefits of increased prices post lockdown.

 

Australia:
Australia is home to high-grade Manganese Ore but confronted with not only with the costs of the virus itself, but Miners also have to deal with border closures, dangers of FIFO (Fly In Fly Out), and the proximity required by labourers in mines. It has been reported that mineworkers are refusing to work in shifts after thousands of FIFO workers continue to move through work camps and mine sites in Queensland. Meanwhile, Western Australia has prohibited all FIFO workers from New South Wales to its resource projects, as the state encounters the highest number of covid-19 cases in the country.

 

Future Outlook
Chinese inventories at the port are sufficient for the month, however, even after the mines reopen, it would take at least two months for fresh delivery to be fulfilled. Therefore, this could trigger the demand for Manganese ore in China.