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(AMM) Squeeze takes silicomanganese to 90 cents a pound
New York 30 May 2007 23:25
Silicomanganese prices have spiked again, and consumers are bracing themselves for even higher prices driven by a tightening manganese ore market. Spot silicomanganese has jumped to between 84 and 90 cents per pound in the United States, up from a previous range of 72 to 80 cents per pound. One trader, who reported offering truckloads of the material for more than 90 cents per pound, said the shortage of supply has customers who are seeking large quantities at a disadvantage. "It actually works against you for larger quantities because the market is that tight," he said. "The problem is that a small-time consumer may be able to go to six or seven guys to get material, but a larger consumer might only find two or three guys who can quote on it." A pair of traders said consumers who were previously waiting for prices to fall before ordering are now hungry for material and have no choice but to pay top prices to meet their production needs. A manganese ore shortage in China continues to underpin the high prices for manganese metal and alloys. And the recent price rally for manganese alloys is showing no signs of slowing down, as customers anticipate a critical shortage once Cia. Val do Rio Doce closes its Azul Mine. The shutdown, to begin in June, is slated to last at least six months. Market sources said the company's lower manganese ore sales will further aggravate the current global shortage. In the first quarter of 2007, CVRD's ore sales fell 60 percent to 83,000 tonnes from its sales the previous quarter. Also tightening the supply picture in China is the restructuring of Ghana Manganese Ltd. on the back of its takeover by Ukraine's Privat Group in March. "The price of manganese metal is going up, we're seeing crazy prices and then there is the manganese ore shortage in China," a producer said. "Then once Azul closes that will add up to even more tightness in the manganese ore market."
One producer said he expects to see the alloy trading for more than $1 a pound in the near term. Rumors that BHP Billiton is experiencing production problems, however, have been largely dismissed by U.S. traders as unfounded. U.S. silicomanganese production continues to struggle to fill the void, as the country's largest producer, Eramet Marietta Inc., cannot make enough to take advantage of the rocketing spot market, sources said. Copyright © Metal Bulletin PLC. All rights reserved.