SHANGHAI, Mar. 18 (SMM) –
Trading activity at manganese ore markets at Chinese ports were depressing last week. Most of the goods bought were long-term contracts ordered by manganese alloy producers earlier. Manganese alloy producers stood on the sidelines, with most showing high intention of suspending production due mainly to continuously falling manganese alloy prices. BHP is now quoting manganese ore on a weekly basis instead of previous monthly basis, which SMM believes will give overseas suppliers an upper hand on pricing and thus aggravate volatility in manganese ore prices. Manganese ore prices should continue to drop this week.
In the Port of Tianjin, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 47.5-48/mtu; RMB 40.5-41/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 39.5/mtu for South African high-iron manganese ore (Mn35-36%, Fe18%). In Southern ports, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 46.5/mtu; RMB 38.5/mtu for South African high-iron manganese ore (Mn35-36%, Fe20%); RMB 41/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 47.5-48/mtu for Australian high-silicon manganese ore (Mn36%, Si20%).
Inventories at Chinese ports were 2.55 million mt last week, with 1.19 million mt in the Port of Tianjin, slightly down on a weekly basis, and 850,000 mt in the Port of Qinzhou, slightly up from the previous week. In the Port of Tianjin, inventories of South African mixed carbonate manganese ore were 250,000 mt, and supplies of other major classes of high-grade manganese ore were sufficient. Traders at ports were pessimistic over future prices, and prices of selected classes of manganese ore were lower than those in overseas markets.
The National Energy Administration announced March 14 that power consumption in China hit 337.4 billion kwh in February, down 12.5% YoY. According to the National Bureau of Statistics, crude steel output across China totaled 125.45 million mt during the first two months f 2013, up 10.6% YoY. Daily average crude steel output was 2.13 million mt, up 14.32% from 1.96 million mt in December 2012. Steel stocks are mounting, with rebar prices edging down.
It was reported that OM (Manganese) was accused by local court of damaging and desecrating the Two Women Sitting Down sacred site at Bootu Creek. The subsidiary of OM Holdings has admitted damaging the site, but it is contesting two separate charges of desecration. The case is believed to be the first prosecution of a company in Australia for desecrating a sacred site.
Manganese ore prices are expected to drop further this coming week as imported manganese ore is arriving at ports in large quantities and as traders are generally bearish toward future prices.