On March 18, Tropical Cyclone Megan caused widespread flooding in Groote Eylandt, Australia, causing severe damage to infrastructure including docks, port facilities and transport bridges.
On April 22, South32 released its third quarter report for fiscal year 24. South32 stated that the repair work of infrastructure such as terminals and transport road bridges is in progress, and it is expected to restart terminal operations and operations in the third quarter of fiscal year 25 (first quarter of 2025). Export sales.
Affected by this, the price of manganese ore at the port has risen sharply. Can the manganese ore rally continue? What will happen to the global manganese supply and demand pattern?
2. Supply and demand pattern of manganese element
2.1 Global manganese ore reserves
Data released by the United States Geological Survey shows that as of 2023, global manganese ore reserves are 1.9 billion tons, but high-grade manganese ore reserves are only about 700 million tons, and they are basically located in the Southern Hemisphere (South Africa, Australia, Brazil and other countries). China's manganese ore reserves are not low, but domestic manganese ore resources have problems such as low ore grade and high mining difficulty, and the actual recoverable reserves are not high.
2.2 Global manganese ore production
In 2023, a total of 20 million tons of manganese ore will be produced globally. The top three countries are South Africa, **on and Australia, of which South Africa produces 7.2 million tons, accounting for 37%; **on produces 4.6 million tons, accounting for 24%; Australia produces 3 million tons, accounting for 16%. South Africa's manganese ore is of high grade and is a medium- to high-grade ore with a manganese content of 30-40%. The Australian mine and the **on mine are high-grade ores with an average manganese content of 40-50%. The manganese content of ore in my country is only 15-32%, and high-grade ore is extremely scarce. Ao Mining occupies an important position in the high-grade manganese ore market, and the impact of this incident on the supply of high-grade manganese ore cannot be underestimated.
2.3 Domestic manganese ore supply
China's manganese ore reserves are not low, but the actual recoverable reserves are low, so my country's manganese ore is heavily dependent on imports. In 2023, my country imported a total of 31.42 million tons of manganese ore, with only 7 million tons of domestically produced manganese ore, and its dependence on overseas manganese ore is as high as 80%. (Data released by the United States Geological Survey show that China’s manganese ore production in 2023 is only 740,000 tons. The statistical caliber is relatively small and has little reference significance. According to the "International Manganese Institute EPD Conference Annual Report (2022)", China's manganese ore production in 2022 is 6.45 million tons, based on which it is estimated that domestic manganese ore production in 2023 will be approximately 7 million tons)
In terms of import structure, my country mainly imports manganese ore from South Africa, Australia and **on. In 2023, my country will import a total of 14.64 million tons of South African manganese ore, accounting for 49%; it will import 5.25 million tons of Australian ore, accounting for 18%; and it will import 4.9 million tons of **onese ore, accounting for 16%. As my country's pricing power for high-grade manganese ore is weak, the suspension of Australian ore shipments will have a greater impact on the domestic manganese ore market, or lead to an imbalance in the supply and demand of high-grade manganese ore.
2.4 Manganese ore demand
More than 90% of manganese ores are used to produce manganese alloys (silicomanganese, ferromanganese) and manganese metal. Manganese ores are closely related to the steel industry. Silicomanganese is the largest downstream industry of manganese ore. Based on the calculation that the production of one ton of silicomanganese consumes 2.2 tons of manganese ore, the silicomanganese industry will consume a total of 25.34 million tons of manganese ore in 2023. Recently, the production costs of domestic silicomanganese plants have risen rapidly, corporate losses have intensified, and companies are not willing to resume production. However, as steel mills recover their profits, hot metal production is expected to maintain growth. Driven by demand, the profits of silicomanganese companies are likely to recover, and the operating rate may slowly increase. Even if the loss pattern of silicomanganese plants is difficult to change, the current silicomanganese production capacity is low and there is little room for continued production reduction.
In the medium to long term, the domestic steel industry has entered a period of stable development, and crude steel production has reached the theoretical upper limit, with limited room for further growth. But looking globally, emerging markets such as
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