Seaborne Manganese Ore prices hit further lows, but the fall is now slender as the sellers are restraining themselves from concluding deals at lower levels. Manganese ore prices have come down by 8% as compared to the previous month due to deteriorating sentiment, aggressive bidding, and high stocks. In India, demand remains moderate and the market sentiments are bearish due to low demand for Silico Manganese.
Chinese traders are freezing their stocks creating supply shortage. Manganese ore availability in Chinese ports is tighter, but not due to unavailability of material but, market participants are avoiding selling into falling markets, which is leading to “frozen stocks,” . Traders are also practicing “averaging out” to avoid losses, which involves buying cheaper material to counteract the higher-priced material they don’t want to sell at a loss.
When alloys prices were under pressure, producers restrained from consuming high-cost ore and relied more on cheaper ore from port traders so that they could balance out the production costs and survive. Due to this, prices are quite firm in the Chinese Ports as the traders are more active in purchasing the July cargoes that are priced significantly lower than before. Traders are pushing up port prices to avoid losses for the material they already hold in port. However, such scenario puts traders under a lot more pressure than the producers, as the producers can mix the high graded material with the cheaper once to compensate the cost, but if the traders sell at low cost, they have to incur the losses.
Prices for Australian Lumps, Mn 46%, Fe 5%, are down at USD 6.5/dmtu CIF India. South African Carbonate Ore (Lumps, Mn 37-38%) is unchanged W-o-W and are being offered at USD 5.4/dmtu CIF India and Manganese ore Lumps, Mn 44%, Fe 5%, Gabon is offered at USD 5.9/dmtu for July shipment.
On the future outlook, buyers feel that the prices may continue to fall in the next week amid the supply-demand dynamics as South African miners have been continuously reducing its prices to entice buyers. However, with the freezing and averaging methods being practiced, market participants are more on a wait and watch mode.
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