SHANGHAI, Oct. 12 (SMM) – 
 
Review:
Inquiries and trading at ports were both thin after the weeklong holiday. Rising silicomanganese alloy tender prices by steel producers for October turned manganese ore traders optimistic. Australian high-silicon manganese ore (lump) in southern ports ticked up by RMB 0.5/mtu due to tight supply. Large quantities of manganese ore will arrive in China during the first two weeks of October, which will add oversupply pressure. Besides, time is still needed before demand can pick up and power tariffs have been raised in parts of south China due to the onset of dry season, also putting downward pressure on future manganese ore prices. CML’s offers for Gabon manganese ore were flat with a month earlier, but its offers for other categories of manganese ore have not yet been finalized, leaving Chinese traders cautious about importing.    

Prices:
In the Port of Tianjin, mainstream traded prices for Australian manganese ore (Mn48%, lump) were RMB 41-41.5/mtu; RMB 34.5-35/mtu for South African mixed carbonate manganese ore (Mn38%, lump), RMB 38/mtu for South African high-iron manganese ore (Mn35-36%, Fe18%), and RMB 37/mtu for Brazilian manganese ore (Mn45%Fe5%) . In southern ports, the mainstream quotations for Australian manganese ore (Mn48%, lump) were RMB 41-41.5/mtu. Mainstream traded prices were RMB 38/mtu for South African high-iron manganese ore (Mn35-36%, Fe20%); RMB 34-34.5/mtu for South African mixed carbonate manganese ore (Mn38%, lump), RMB 39.5/mtu for Australian high-silicon manganese ore (Mn36%, Si20%), and RMB 37/mtu for Brazilian manganese ore (Mn45%Fe5%, lump).

Inventories:
Manganese ore inventories at ports grew significantly to 2.61 million mt last week. Approximately 200,000 mt arrived in the Port of Tianjin, bringing its total stocks to 1.62 million mt. Inventories at the Port of Qinzhou were around 740,000 mt, while inventories at other ports were little changed. Most of the goods arrived was from South Africa and Australia. 

Iron Ore:
Morgan Stanley raised its iron ore price forecasts for Q1 and Q2 next year, citing recovery in global demand and extension of losses in shipping markets into 2014. It projects that iron ore prices will hold at USD 130/mt in Q1 2014 and USD 120/mt in Q2 2014, up from its earlier forecasts of USD 125/mt and USD 117/mt, respectively. The company expects iron ore prices to average USD 120/mt next year, up 3% from 2013.

Forecast:
Manganese ore prices will remain little changed this coming week. On the one hand, rising silicomanganese alloy prices in October will underpin manganese ore prices. On the other hand, large arrivals will preclude any spike in manganese ore prices.