TEX update on manganese ore outlook for 2009
steelguru.com
An economic differential between an excessive profit at manganese mines and a loss at ferroalloy producers is coming up. When price of manganese ore in 2009 is looked over, it is questioned which strategy for pricing of manganese ore is developed by major manganese mines.
From a common point of view, it is unlikely to continue this situation for a long period but an issue of the circumstances is in a fog at present. The subject in question at moment is price of manganese ore to be offered in January of 2009 by major manganese mines to Chinese producers of ferroalloys for shipments in January to March quarter of 2009.
China is the largest consuming country of manganese ore in the world but it is viewed that China has held excessive stocks of manganese ore, totaling to approximately 2,000,000 tonnes and Chinese side has taken a cautious attitude for new purchase of manganese ore. Apart from the manganese ore to be contracted between major manganese mines of overseas countries and regular consumers of China to settle ore price on quarterly base under quantity contract on yearly base, spot price of manganese ore to be supplied from other sources has already fallen to a level of USD 7 to 8 per Mn 1% CIF China.
China is anticipated to import manganese ore on a scale of 8.0 million tons in 2008 (already imported 6.65 million tons in January - October), which supposedly included approximately 6.30 million tons imported from major manganese sources of South Africa, Australia, Gabon and Brazil having shared 80% of the whole import. The remaining quantity of 1.50 million tons was imported from such revived sources as Malaysia, and so on, which resumed producing manganese ore for the steeply risen ore price. There is an opinion in the market that, when price of manganese ore falls to a lower level than USD 5 per Mn 1%, these sources will stop again to produce manganese ore.
A substantial differential between price level of US$16 per Mn 1% (nominal one) for regular material and another price level of USD 7 to 8 per Mn 1% for spot material has arisen and the matter in question for 2009 is how to consolidate this price differential. In view of the fact that the booms in natural resources and steel production are suddenly and rapidly breaking off and shrinking from October of 2008, it is strongly marked to see on which level price of manganese ore is settled between manganese mines, which have earned excessive profits from higher prices of manganese ore, and Chinese producers of manganese ferroalloys, which have seriously suffered from big losses. The hard negotiations between overseas mines and Chinese consumers on price of manganese ore for shipments in January to March quarter of 2009 will be taken place soon.
Movements of manganese ore in main market:
? Price Index (48%) Benchmark price (44%) Spot price (44%)
Q1 '08 11 11-12
Q2 '08 11.2 12.2 15-17
Q3 '08 12.4 16.2 17-20
Q4 '08 16.4 16.3 8-9
Q1 '09 16.5 Unknown 7-8
Price index in USD FOB
Others in USD CIF |
