LONDON Global manganese
ore prices will continue to rise in the first quarter on strong
Chinese demand, tighter supply and low inventories, market
"Its certainly firming and
there is a tightness," one trader told AMM sister
publication Metal Bulletin. "Well continue to
see an increase over the first quarter. Theres a high
level of Chinese consumption and I think in (the second half of
2012) people priced in too much negativity."
index price for 38-percent manganese ore f.o.b. South Africa
rose to $4.06 per dry metric ton unit (dmtu) of metal contained
on Dec. 21 from $3.94 the previous week and a fourth-quarter
low of $3.77 in mid-October. Metal Bulletins
index price for 44-percent manganese ore c.i.f. Tianjin was
$5.13 per dmtu of metal contained, down slightly from $5.15 a
week earlier but well above the fourth-quarter low of $4.91 in
According to sources, ore
producers had less material to offer into China for January and
"For sure we have been in a
position to be very short term in our commitments to customers
because we believe there could be some tightness and the price
will go up," one supplier source said. "The market is behaving
in such a way that it could happensales are going very
fast. When we offered, everything went quickly, which was very
Whether the rally will be
sustained will depend on alloy producers, who will not be able
to shoulder rising ore prices if alloy prices remain subdued,
market participants said.
ferromanganese price, for example, has dropped to between
$1,100 and $1,180 per gross ton from between $1,190 and $1,230
at the start of the quarter.
alloy prices also have dropped in the U.S. market, with
AMMs spot price slipping to between 85 and 90
cents per pound on Dec. 20 from 89 to 91 cents the previous
week and 90 to 92 cents at the start of the quarter.
"Certainly a restock is part of
the reason for rising prices, but to what extent will ore
buyers be able to continue to buy at these levels? Will they
simply shut down instead?" one market source said.
Chinese buyers have been able to
pass on the cost of rising ore prices because alloy prices have
been rising faster there than in the United States or Europe.
"The Chinese can afford to pay more; they can pass the cost on
and the Europeans cant," the market source added. "Is
this trend sustainable if the Europeans cant afford the
A version of this article was first published by AMM sister
publication Metal Bulletin.