NEW YORK BHP Billiton Plc is changing the way it does manganese alloys business in the United States by selling material basis c.i.f. New Orleans rather than delivering directly to customers.
"BHP said that in the future they would only quote a c.i.f. NoLa price. Theyre trying to align manganese with how theyre doing all their other business," a purchasing source said.
"They had a lot of discussions with people like ourselves that they wanted to do the business like iron ore," a trader said.
BHP is now quoting material on a c.i.f. New Orleans or f.o.b. Australia basis, making buyers responsible for more of the transportation costs, sources said.
BHP declined to comment on "market speculation."
The change will be hard to sell to consumers, traders said.
"Clearly theyre not going to convert to that," the first trader said. "They (consumers) want the service."
The Melbourne-based company is possibly looking to sell its manganese assets, AMM sister publication Metal Bulletin reported in September, which some sources said could be a reason behind the change in sales terms.
"Refined manganese is a packaging business; theres no money in it," a second trader said.
It was reported in November that the company had hired Citibank to sell Temco, its manganese alloys smelter in Australia. Temco has the capacity to make 65,000 tonnes of silicomanganese and 240,000 tonnes of high-carbon ferromanganese annually. BHP shut the plant in February to re-evaluate its profitability, only to reopen it in May (amm.com, May 22).
In other recent changes to its manganese alloy business, the company idled production of silicomanganese at its Meyerton plant in South Africa last February due to high power costs and is switching production there to high-carbon ferromanganese.