SHANGHAI, Apr. 28 (SMM) -

Review:
Offers, prices and trading volumes of spot manganese ore at domestic ports were essentially unchanged during this past week. Domestic traders are becoming increasingly bearish toward future prices for four reasons. First, steel producers may cut procurement prices of manganese alloy by RMB 50-100/mt. Second, operating rates at manganese alloy producers remain low, and SMM estimates over 80% of manganese alloy producers are suffering losses. Third, growing arrivals in recent days weighed down spot manganese ore prices. Fourth, manganese ore CIF prices have far exceeded spot prices. 

Prices:  
In the Port of Tianjin, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 47-47.5/mtu; RMB 39/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 China’s southern ports, the mainstream traded price for Australian manganese ore (Mn48%, lump) was RMB 45-45.5/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 domestic ports were 2.28 million mt during this past week, with 980,000 mt in the Port of Tianjin, up 30,000 mt on a weekly basis, and 800,000 mt in the Port of Qinzhou, also up 50,000 mt from the previous week. The slight rise in port inventories was caused by delayed arrivals of manganese ore ordered earlier. SMM expects manganese ore inventories at ports to fall in the future. 

Steel Markets:
According to the National Bureau of Statistics, China produced 190 million mt of crude steel in Q1 this year, up 9.1% YoY. Despite modest downstream demand, huge finished steel inventories are putting great downward pressure on finished steel prices. Fixed asset investment in China grew 20.9% YoY in the first quarter this year. Investment in property sector and auto sales volumes also staged fast growth. However, growth in finished steel consumption fell short of supply, leading to unbalanced supply and demand. In this context, finished steel prices should remain low for the foreseeable future.  

Overseas News:
GAA, a leading ferroalloy producer, recently announced it has acquired 100% stakes of GM’s Georgia branch, allowing it to expand its ferroalloy business and optimize its investment portfolio.

Forecast:
Manganese ore CIF prices are growing steadily, but imported manganese ore prices at domestic ports are depressed due to anemic downstream demand. Offers for some categories of mainstream manganese ore were volatile. Bid prices for manganese alloy by steel producers will be announced after the May Day holiday. SMM expects manganese ore prices at domestic ports to remain low or even drop in this coming week.