With global manganese ore price coming down and chances of further correction in price, the Silico Manganese market is far from optimistic. Since the major steel mills successively finalized the tender price in December, the Silico Manganese market began to be operate weakly due to the previous expectations falling short. The Silico Manganese prices in China continuously declined under the joint effects of weak demand, lower manganese ore price, capital pressure and gradually rising stocks.
The alloy market looks somewhat desolate as a result of steel mils postponing purchase and reduced quantity with demanding price. Up to now, the cumulative decline in the month is around RMB 500 /MT (mainstream quotes fell from RMB 8,300-8,400 /MT from the beginning of the month to the current level of RMB 7,700-7,900 /MT).
The latest data collected show that today’s mainstream price of Silico Manganese is between RMB 7,700-7,900 /MT, a further decline from last week. In addition, the alloy index shows that the price of Silico Manganese 65-17 is also weak: the price in Henan, Hebei, Shandong, Jiangsu etc is between RMB 8,065 and 8,336 /MT (delivered, cash including tax).
Futures market:
Silico Manganese contract 1905 is traded with a gap down and dominated by narrow shock. It is basically supported by the average price line throughout the day with limited downside space. Opening at 7,236, the highest at 7,274, the lowest at 7,162, closing at 7,244, and settled at 7,225, down 1.17% (86 points). The position held is 80,128 lots, and the volume of transactions has a certain degree of increase compared with the previous trading day. New positions taken are 17,188 lots.
Manganese Ore:
CML revealed the price of manganese ore for January 2019 China shipment, which is USD 7.25 /dmtu for Australian lump Mn-46% Fe-6%, down by USD 0.35/dmtu from the December offer.
Recently, the offers of manganese ore by foreign miners are releasing one after another. The slight downward adjustment on price has obviously pushed up the pessimism in the industry, which coupled with price reduction by alloy plants and high level of stock in the South; it’s possible that ore price will be loosened slightly. Now the stock at Tianjin port in the North is about 1.8 million tonnes which is at a relatively reasonable level but the stock at Qinzhou port in the South has exceeded 1 million tonnes, which creates higher possibility for a price downturn.
Future Outlook:
Based on the above analysis, some believed that the Silico Manganese market is expected to continue with weak operation in the short-term. Besides, it may be subject to lower price under the joint work of pessimistic mindset, capital pressure of some plants and hard bargain by mills. Of course, close attention needs to be paid to new round of tenders and change in supply and demand dynamics, to be clearer of the specific trend. However, with the spring festival and hindrance of transportation thereby, winter stocking-up by various mills might be advanced.
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