Manganese prices face further downside risks on high inventories of stainless steel

SHANGHAI, Mar 13 (SMM) – Prices of spot manganese have not received significant support from the resumption of downstream demand and have extended their slide this week. SMM expects the prices will remain weak with pressure from elevated inventories of #200 cold- and hot- rolled stainless steel. 

As of March 12, transaction volumes of downstream #200 series stainless steel picked up slightly from end-February, but this remained overshadowed by the arrivals of new cargoes, which kept social inventories at high levels. 

Overseas demand for manganese could also be negatively impacted as the coronavirus pandemic spread quickly outside China. According to some Chinese exporters, overseas enquiries for Chinese electrolytic manganese and manganese products reduced in March. This could trigger declines in China’s exports of electrolytic manganese and manganese products in March-April. 

As of March 13, ex-work prices of spot manganese in China’s major production areas stood at 10,300-10,500 yuan/mt, down 100 yuan/mt from the previous day and down 600 yuan/mt from a week earlier. 

Fob prices of manganese departing from Chinese ports have declined $285/mt from end-February to $1,530-1,550/mt as of March 13, SMM assessed. The steep decline in prices has raised bearish prospects among market participants.