SMM Analysis of China Manganese Ore Demand in 2022-2023

SHANGHAI, Dec 19 (SMM) - In 2022, due to the impact of the pandemic and poor end demand, the downstream demand for manganese alloys weakened. In particular, the operating rates of downstream manganese alloys were less than 50% in the second half of the year, and the demand for manganese ore was suppressed. Due to the change in sales strategy of overseas mines from the regular pricing model to the bidding model in 2022, the quotations by overseas mines kept rising, deterring small and medium-sized Chinese traders from importing. As a result, the import volume fell from 2021. With supply and demand both falling, the port inventories remained in a small surplus. Customs data showed that China's manganese ore imports from January to August 2022 were 16.93 million mt, a year-on-year decrease of 18.82%.
In 2023, SMM believes that China's real estate industry will not be optimistic and environmental protection measures will remain stringent, thus the demand for crude steel may further decline. This will take a toll on the demand for manganese alloys and manganese ore. However, steel mills may step up exports against the weakening domestic demand, which will improve manganese ore demand. In addition, with the development of the new energy vehicle industry, the battery industry will stand to benefit in the future, which will also drive the demand for manganese ore. Therefore, the domestic manganese ore demand may improve after a short-term downturn, and the supply will also increase with the improvement of demand.