Increased supply and weak overseas demand to cap upwards of manganese prices 

SHANGHAI, Apr 10 (SMM) – China’s spot prices of refined manganese, an essential raw material of #200 stainless steel, will see limited upward potential in the near term as domestic supplies continue to expand while a slew of overseas steelmakers announced output cut or suspension due to the coronavirus impact. 

SMM data showed that the daily average supply of refined manganese in China rose close to 4,000 mt as of April 9, from about 3,600 mt in late-March. Higher costs drove some Chinese steel plants that use ferromanganese as the major feedstock to slightly increase purchases of refined manganese. This encouraged production at some manganese plants, who produced for future deliveries and withheld from providing spot offers. 

Steel plants in countries including Brazil, India, Germany, Japan and the US have shut down or reduced output as the COVID-19 pandemic escalated overseas. This is set to depress their purchases of manganese products from China in April. 

In the Chinese markets, prices of #200 stainless steel in Wuxi and Foshan continued to trend downwards with the inventories declining at a slow pace. The prices will likely remain weak as producers focus on destocking. 

As of April 10, prices of refined manganese in China’s major production areas stood at 10,300-10,500 yuan/mt, ex-work with taxes included, up some 150 yuan/mt from end-March, showed SMM assessments. Export prices stabilised at $1,500/mt fob China as of April 10.

Some spot offers of high-grade refined manganese, standing at 10,500 yuan/mt, sidelined downstream consumers and actual trades occurred mostly at 10,300-10,400 yuan/mt. 

In the latest round of tenders by steel mills for April, the purchasing prices of manganese flake stood mostly at 10,500-11,260 yuan/mt. The purchasing prices by some steelmakers in south China were significantly lower than the average prices, which also weighed on the prospects for near-term manganese prices.