China to look abroad to meet manganese ore demand

China to look abroad to meet manganese ore demand

The explosive growth in China’s steel industry will force the country to turn to imports to meet more than half of its manganese ore needs by 2007. China, already the world’s number one importer of manganese, has more than 200 proven manganese ore reserves with a combined volume of 560 million tons. However, the manganese grade is commonly low –the average grade is 21%– and the rich manganese ore only accounts for 6% of the country’s total reserves. Therefore, only about 40% of the manganese ore resources are actually usable. China’s finished manganese ore output in 2004 totaled only five million tons due to low production concentration and substandard technical levels. In addition, since manganese ore development consumes large amounts of energy and causes heavy pollution, production has been slow to start in many provinces. Several authorities forecast that China’s steel output may increase 40-45 million tons in 2005. Such a rise in output equates to a need for an additional 500’000 tons of ferromanganese and more than 1.2 million tons of manganese ore. China will thus have to depend largely upon manganese ore imports due to its limited domestic production. China’s estimated manganese ore import may top 3.7 million tons in 2005, which means the country would have to snap up more than half of the 7 million tons of manganese ore traded globally. This in turn has put a great deal of pressure on the international manganese ore market. By year’s end in 2004, Australian manganese ore export quotations reached RMB 1200/ton ($145/ton). Also by that time, China’s domestic manganese ore price had doubled year on year. At the moment, China manganese ore imports meet one third of total consumption. China is expected to continue growing at an accelerated pace, therefore prompting forecasts that China will have to rely on imports to satisfy more than half of the country’s manganese needs by 2007.