manganese prices to stay up

Battle Line On Manganese Business In China For Q4 / 07 Is Still In Heated Atmosphere
= Mn-Ore Price Is Rising, Factors To Create Disturbance, Such As Decreased Supplies, Have Piled
The manganese market, mainly in China, has a big probability to be attacked again by a heated atmosphere. The reason is that a basic tone to rise price of manganese ore for contracts to be concluded with major consumers in China for shipments in October - December quarter of 2007 has been clearly known and the exports of manganese ore for China in the quarter are anticipated to be restrained to a certain extent.

The prices of manganese ore contracted with major consumers in China for shipments in July - September quarter have been mainly settled on a level of US$6.40 - 6.50 per Mn 1% CIF. Also, it is supposed that a leading supplier of Australian manganese ore is proceeding their negotiations with Chinese consumers to rise prices of Australian ore to a level of US$6.90 - 7.10 per Mn 1% CIF. In comparison with a frenzied rise of prices for manganese ore as arisen in the first half of this year, an extent to rise prices of manganese ore in the second half is thought to be restricted but, by taking into consideration of the price of manganese ore for April - June quarter, which had been settled on a level of US$3.75 per Mn 1% CIF China, the price to be proposed for October - December quarter as mentioned above will have a rise of approximately 90%.

China imported 3,270,000 tons of manganese ore in January - July of 2007, which remained on a similar scale to that ( 3,210,000 tons ) in the same period of 2006, but many factors to be hard to increase hereafter the imports are forecasted. For instance, Gabon so far exported a large quantity of manganese ore for China but, owing to the mechanical troubles occurred at shipping port of Gabon, the deliveries of manganese ore from Gabon are anticipated to be restrained.

Also, while Consolidated Minerals Limited ( CML ) of Australia has been exporting manganese ore mainly for China, Palmary Enterprise Limited ( Palmary ) has come on the stage to take over CML and made on the 12th of September their off-market offer of A.$4.50 cash per CML share, enabling Palmary to take an advantageous position for this matter as of the end of last week. If Palmary will be successful in the acquisition of CML, it is deeply interested in knowing what sort of an attitude does Palmary take for sales of manganese ore. If Palmary is backed by Privat of Ukraine, which has been managing Nikopol Ferro-Alloy Works with capacity to produce more than one million tons per annum of manganese ferro-alloys in Ukraine and has already assumed from July of this year a positive attitude to acquire CML, its aim is to secure manganese ore as raw material for production of manganese ferro-alloys and, therefore, it is marked how extent does Palmary exhibit their positiveness for exports of manganese ore to China. CML produces one million tons per annum of high grade manganese ore with lower phosphorus content.

Although two counters of Gabon and Australia had expanded their exports of manganese ore for China, the supplies from these two sources in 2007 have shown indications of a disturbance. In addition to the present circumstances which Ghana, Brazil and India have been decreasing their exports of manganese ore for China in 2007 to a considerable extent, a factor to be obliged to have a tension for the future supply of manganese ore from Western Australia is thought to come up. For a reference, Ghana, Brazil and India are the countries, having decreased their exports of manganese ore for China in 2007 as mentioned above, and the quantities of manganese ore imported from these three sources into China in January - July of 2007 were <> from Ghana : 177,000 tons ( compared with 350,000 tons in the same period of 2006 ), <>from Brazil : 176,000 tons ( 260,000 tons in 2006 ) and <> from India : 46,000 tons ( 80,000 tons in 2006 ).

The demand for manganese ore in China has become very active and the cargoes of manganese ore imported into China and stocked at wharfs of such discharged port as Zhangjiang and so on for sales to spot consumers have decreased to a substantial extent, telling a tightness on supply of manganese ore in domestic market of China.

The Central Government of China announced the regulations dated on the 18th of August to prohibit production of ferro-manganese by small blast furnaces with less than 300 cubic meters but many of the parties concerned in China have an opinion that the regulations will put a limitative influence on the market. The methods to produce ferro-manganese in China have divided into operations by electric furnaces and operations by blast furnaces and the portion to operate electric furnaces is fairly larger than that to operate blast furnaces. Accordingly, the regulations announced as mentioned above will cause only a limitative decrease of quantity on ferro-manganese.to be produced in China.

Chinese producers of ferro-alloys are rather interested in knowing about an issue of the duty to be imposed on exports of manganese ferro-alloys from China, which has been postponed in June of 2007 to raise. The circumstances, which the duty on exports of Chinese manganese ferro-alloys is no wonder to raise from 10% at present to 15 - 20% from October and afterwards, are developing, because the exports of manganese ferro-alloys from China have been still maintained on a high level. China exported 430,000 tons of silico-manganese in January - July of 2007, having increased by 61% compared with that ( 261,000 tons ) in the same period of 2006. This considerable increase of the exports is a contrary movement to the intention by the Central Government of China, which has wanted to put the brake on the increasing exports of manganese ferro-alloys from China.
last modified : Mon 01 Oct, 2007 [11:41]