SHANGHAI, Aug 21 (SMM) – China’s manganese exports in July shrank to the second lowest level so far this year, as manganese prices stood at record highs, SMM believes.
China exported 34,460 mt of manganese last month, down 13.3% from June. The lowest volume so far this year occurred in February and stood at 23,276 mt.
Manganese prices climbed from May while operating rates across Chinese producers averaged at lows as major producers in the north cut production and as environmental issues limited production in the south. SMM assessments showed that manganese prices in Hunan province averaged 17,989 yuan/mt in July, up over 50% from April.
While short supplies could continue to buoy prices, we see limited downward room for manganese export volumes and expect volumes to hover at 35,000-40,000 mt, given few alternatives in the market.
For alternatives such as manganese alloy, consumers have to purchase much larger amounts given the low manganese content. As demand grows, prices of manganese alloy are also likely to climb, and this is unlikely to lower purchasing costs.