Manganese ore prices to China remain sickly despite healthier steel margins

While steel prices have been healthy, market sources say manganese ore prices to China will continue to be sickly until steel production increases. S&P Global Platts assessed 44% ores flat from last week at $4.60/dmtu CIF Tianjin Friday, as buyers awaited new offers from high grade ore producers.

37% manganese ores slipped to $3.20/dmtu CIF China Friday from $3.50/dmtu CIF China last week as new offers emerged.

Chinese traders and end users said they heard a range of offers for South African 37% ore at $3-$3.30/dmtu CIF China. Two traders said they heard that Australian material had sold out, and were awaiting the next offer by S32 to understand market levels.

One trader said he had not bought any material as he had purchased enough in previous weeks, and also has abundant supplies at port. "We think prices will fall to $2.50/dmtu CIF China in the next 1-2 months. It is hopeless, unless miners cut production," he said.

However, he noted that spot buying at Chinese ports had finally begun again, albeit in limited amounts. He is offering Australian ore at Yuan 36/dmtu, Gabon ores at Yuan 34/dmtu and South African ores at Yuan 28/dmtu, ex-port.

Another trader agreed that the outlook is negative despite stronger steel prices, and said that things would not turn around for alloy prices until steel mills increased production.

One South African producer said that he had offered at $3.30/dmtu, CIF China, and said that he had done a deal for a small shipment for 14,000 mt at $3.25/dmtu, CIF China, early March laycan. The counterparty could not be confirmed.

Sources estimated total port stocks in China to be at 3.3 million mt this week.

China imported 1.97 million mt of manganese ore and concentrate in January, up 81.5% year on year, according to the latest monthly statistics published by the General Administration of Customs Thursday. However, compared with December, imports fell 2%.

For 2016, China's manganese ore and concentrate imports totaled 17.05 million mt and averaged 1.42 million mt/month.