Manganese metal markets resurface but for how long?
Manganese metal markets in both China and Europe have resurfaced from the deep to a positive growth trajectory in May. While demand for finished steel products is on track for recovery, steel consumers that have just resumed purchasing of manganese, were faced with steep price hikes.
May was a favorable month for Chinese suppliers of manganese metal with spot prices for flakes climbing by an average of 200 CNY/t (30 US$/t). These can be seen as positive results of recent purchasing activities from a select few large consumers: POSCO and TISCO stabilised their tender prices and Baosteel increased it by 500 CNY/t. The Chinese domestic market recovery was followed export with demand from European buyers improving since May and pricing of Chinese manganese metal increasing by 60 US$/t during this time.
In addition to acceptable demand levels, Chinese producers of manganese metal also experienced pressure from the raw materials side. Amid a backdrop of quarantine measures and resulting interruptions to shipments, suppliers from South Africa, the largest supplying region of manganese ore in the world market, raised their sales prices.
It is expected that quotations may stabilise or even decline somewhat over the next two weeks. Growing demand in the domestic and foreign markets has led to an increase in daily production of manganese metal in China by 1.5%, to 4 KT per day during May. While South African companies' restarted mining and shipments of ore, spot quotations of manganese ore in Chinese ports decreased by almost 15%, while its reserves are still considerable - soaring to 5 MMT. According to industrial price reporting agencies, prices for July shipments of manganese ore from South Africa have also gone down. However, the June tender campaign of the largest manganese consumers in China sends encouraging signs to the market: Baosteel increased the price by 300 CNY/t at once, and POSCO increased the volume of their purchased lot by 300 tons.
Since European steel producers and foundries have resumed work, consumers in Germany, France, Belgium, Eastern Europe have re-started purchasing ferroalloys and metals – including manganese metal flakes. A direct indicator of this purchasing behavior stems from the Metalshub digital platform for ferroalloys and metals. In May the number of customer requests for manganese metal on the platform increased by 20% compared to April. Fixed transaction prices on the platform rose by 8% during the month, exceeding 1600 EUR/t FCA.
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