Chinese manganese ore market faces high inventory levels

Tuesday, 14 June 2011 16:15:54 (GMT+3)   |  
       

Current mainstream quotations of Australian lump ore with 44 percent manganese (Mn) content stand at $6.84-6.92/dmtu at China's Tianjin port, while offers of South African origin lump ore of 44 percent Mn content are at $6.76-6.92/dmtu. Also at Tianjin port, quotations for 38 percent grade Mn ore from Australia are in the range of $6.38-6.61/dmtu, while offers of South African origin lump ore of 38 percent Mn content are at $6.23-6.30/dmtu.
 
With the approach of the rainy season, the pressure from power supply shortages has diminished to a certain extent. As a result, ferroalloy mills in China have been restored to full working order. Meanwhile, high manganese ore inventories make it difficult for manganese ore prices in China to increase. Confidence of some domestic traders is on the poor side as manganese ore prices in China remain relatively low. In addition, Chinese steel giant Baosteel lately made a downward adjustment to its purchase prices for manganese ore.
 
On the other hand, it is reported that Australian miner BHP Billiton's export offers to China for 44 percent grade Mn ore are at $5.5/dmtu, up $0.2/dmtu compared to $5.3/dmtu in May. The rising Australian export price will likely have an impact on the Chinese domestic market, and will at least have a firming effect on spot prices. In such a context, some traders are positive on the prospects for the market, predicting that spot prices of manganese ore will indicate strength in the foreseeable future.

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