SMM Manganese Ore Price Forecast (Apr. 15-19, 2013)-Shanghai Metals Market

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SMM Manganese Ore Price Forecast (Apr. 15-19, 2013)

Price Review & Forecast 01:04:33PM Apr 15, 2013 Source:SMM

SHANGHAI, Apr. 15 (SMM) –

Review:
Spot manganese ore prices at ports generally held stable last week for three reasons. First, falling inventories at ports provided some support to manganese ore prices. Second, manganese alloy producers in south China are more willing to resume production since their production costs will drop by RMB 200-400/mt along with a decline in power tariff with the onset of rainy season in March and April. Third, prices of five major finished steel are rising in April, albeit slowly, and steel consumption is also recovering, which will bolster demand for manganese alloy. However, rising CIF prices of manganese ore constrained purchases by traders. SMM’s surveys found that most traders at ports are holding to the sidelines.

Prices:  
In the Port of Tianjin, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 47-47.5/mtu; RMB 39-39.5/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 45.5/mtu; RMB 38.5/mtu for South African high-iron manganese ore (Mn35-36%, Fe20%); RMB 39/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 45.5/mtu for Australian high-silicon manganese ore (Mn36%, Si20%).

Inventories:
Inventories at Chinese ports were 2.4 million mt last week, with 1 million mt in the Port of Tianjin, down 10,000 mt on a weekly basis, and 780,000 mt in the Port of Qinzhou, also down 20,000 mt from the previous week. SMM indicates that goods arriving last week are mainly Australian high-grade manganese ore and manganese ore from Turkey. Goods available for sale were limited sine most have been ordered by manganese alloy producers.

Steel Markets:
According to annual reports of steel producers, Angang Steel lost more than RMB 4.2 billion, Magang Group posted nearly RMB 3.9 billion in losses, and Baosteel Group Corporation’s profits from its main business fell nearly 60%. Depressed steel prices and high production costs are the major reasons behind steel producers’ losses. Platts iron ore index rose from 88.5 in last September to 160 in early February, an increase of nearly 81%, compared with a less than 32% increase in rebar prices. Iron ore prices have been falling recently, but the downside space should be limited in the future. This is because iron ore port inventories are now 76.6 million mt, down 24% from the peak of over 100 million mt. To sum up, steel prices will move in tight ranges as high inventories have been partly offset by rising steel prices. 

Overseas Markets:
China’s seamless steel pipe and tube exports have slipped into unprecedented predicament due to trade protectionism by the European Commission. There have been seven trade remedy investigations into China’s steel product exports so far this year, which were initiated by Canada, the EU, and Australia and so on. These steel products cover galvanized steel wire, hot rolled steel plate, seamless steel tubes and pipes and many others. It is rumored that BHP and CML will raise prices of manganese ore for shipment in June by another USD 0.05-0.1/mtu, which will push up costs for Chinese traders by then.

Forecast:
SMM believes spot manganese ore prices at ports will remain stable this week as traders will hold back goods and as expectations for rainy season are growing. 
 

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SMM Manganese Ore Price Forecast (Apr. 15-19, 2013)

Price Review & Forecast 01:04:33PM Apr 15, 2013 Source:SMM

SHANGHAI, Apr. 15 (SMM) –

Review:
Spot manganese ore prices at ports generally held stable last week for three reasons. First, falling inventories at ports provided some support to manganese ore prices. Second, manganese alloy producers in south China are more willing to resume production since their production costs will drop by RMB 200-400/mt along with a decline in power tariff with the onset of rainy season in March and April. Third, prices of five major finished steel are rising in April, albeit slowly, and steel consumption is also recovering, which will bolster demand for manganese alloy. However, rising CIF prices of manganese ore constrained purchases by traders. SMM’s surveys found that most traders at ports are holding to the sidelines.

Prices:  
In the Port of Tianjin, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 47-47.5/mtu; RMB 39-39.5/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 45.5/mtu; RMB 38.5/mtu for South African high-iron manganese ore (Mn35-36%, Fe20%); RMB 39/mtu for South African mixed carbonate manganese ore (Mn38%, lump), and RMB 45.5/mtu for Australian high-silicon manganese ore (Mn36%, Si20%).

Inventories:
Inventories at Chinese ports were 2.4 million mt last week, with 1 million mt in the Port of Tianjin, down 10,000 mt on a weekly basis, and 780,000 mt in the Port of Qinzhou, also down 20,000 mt from the previous week. SMM indicates that goods arriving last week are mainly Australian high-grade manganese ore and manganese ore from Turkey. Goods available for sale were limited sine most have been ordered by manganese alloy producers.

Steel Markets:
According to annual reports of steel producers, Angang Steel lost more than RMB 4.2 billion, Magang Group posted nearly RMB 3.9 billion in losses, and Baosteel Group Corporation’s profits from its main business fell nearly 60%. Depressed steel prices and high production costs are the major reasons behind steel producers’ losses. Platts iron ore index rose from 88.5 in last September to 160 in early February, an increase of nearly 81%, compared with a less than 32% increase in rebar prices. Iron ore prices have been falling recently, but the downside space should be limited in the future. This is because iron ore port inventories are now 76.6 million mt, down 24% from the peak of over 100 million mt. To sum up, steel prices will move in tight ranges as high inventories have been partly offset by rising steel prices. 

Overseas Markets:
China’s seamless steel pipe and tube exports have slipped into unprecedented predicament due to trade protectionism by the European Commission. There have been seven trade remedy investigations into China’s steel product exports so far this year, which were initiated by Canada, the EU, and Australia and so on. These steel products cover galvanized steel wire, hot rolled steel plate, seamless steel tubes and pipes and many others. It is rumored that BHP and CML will raise prices of manganese ore for shipment in June by another USD 0.05-0.1/mtu, which will push up costs for Chinese traders by then.

Forecast:
SMM believes spot manganese ore prices at ports will remain stable this week as traders will hold back goods and as expectations for rainy season are growing.