[SMM Analysis] Manganese ore supply disruption revealed supply-demand mismatch

The cyclone in Australia impacted manganese ore exports, leading to a significant short-term supply crunch.

In 2023, China imported 5.24 million mt of manganese ores from Australia. Due to the impact of Tropical Cyclone Megan in March 20224, 4.5 million mt of manganese ore supply is expected to be reduced, of which about 3 million mt are originally scheduled to be shipped to China. Before the supply resumes, South32 may seek alternative transportation solutions, but the capacity of containers and small vessels is limited. It is estimated that about 3 million mt of high-grade manganese oxide ore shipments to China will be affected for the whole year.

Additionally, there is a structural shortage of manganese ore that is difficult to compensate for in the short term. Due to the deficit of about 3 million mt of high-grade manganese oxide ore from Australia, high-grade manganese oxide ore prices saw a significant increase, with the prices of representative Australian lumps and Gabonese lumps rising by nearly 100%. Manganese ore stocks at ports were at low levels and depleted rapidly. Manganese ore inventory at Tianjin Port stood at 3.551 million mt, down 22.7% YoY, and that at Qinzhou Port was 995,000 mt, down 35.4% YoY. Both were at their lowest levels in the past five years, showing a significant decline in port stocks. Manganese ore port clearance volume stayed high, and high-grade oxide ore was relatively scarce. Australian manganese ore port clearance volume at Tianjin Port was 49,000 mt, up 10.1% YoY.

As manganese ore prices continued to rise, traders held their offers firm, with some Australian manganese ore traders refraining from selling. The shortage of manganese ore is difficult to compensate for in the short term. It is necessary to pay attention to manganese ore shipments and inventory changes, and hold cautious about fluctuations in manganese ore and SiMn alloy prices.