Rising Prices of Iron Ore and Alternative Materials Spur Manganese Price Increase in China

Manganese Mining

Chinese manganese prices are likely to maintain an uptrend in the short term due to higher prices of alternative materials and imported manganese ore feedstock.

Scrap Insight assessed the price range for 99.7% grade manganese flake at 13,400-13,700 yuan per ton ex-works today, up by about 7% from May 28. The current price is approximately 14% higher than the 11,700-12,100 yuan per ton ex-works price on April 23. This increase is attributed to the rising prices of alternative materials such as high-silicon silicomanganese and low-carbon ferromanganese, which have started to boost the manganese flake market.

Additionally, there are industry discussions suggesting that China's State Reserve Bureau may stockpile 75,000-100,000 tons of manganese metal. This volume exceeded market expectations, accelerating this week's price rise.

According to Scrap Insight, China’s monthly manganese flake output in May is estimated at 120,000-130,000 tons, with total production expected to reach 1.33-1.45 million tons in 2024.

Manganese ore feedstock prices show no signs of easing. Scrap Insight assessed the prices for Australian 44-46% grade ore at 68-71 yuan per metric tonne unit (mtu) free carrier China on June 6, up sharply from 38.50-40 yuan per mtu on April 23. This increase is mainly driven by production halts at Australian diversified metals producer South32 after intense rainfall and strong winds from tropical cyclone Megan. The mine is expected to resume operations between January and March 2025, prompting more mining firms outside China to raise prices or scale back ore shipments to China.

Higher tender prices paid by Chinese stainless steel mills have also supported the flake market. Shasteel raised its tender price for 800 tons of 97% lump to 14,100 yuan per ton on a delivered basis, up by 1,000 yuan from a tender issued in late May.

South Korea’s Posco issued tenders this week for flake at $1,920 per ton cfr South Korean ports for June and July delivery, up from $1,680-1,740 per ton from a previous tender issued in mid-March. Posco did not disclose the tender volume and suspended purchases in April and May.

Some market participants predict that manganese flake prices will reach 14,000-14,500 yuan per ton next week. However, some mills expect it is unlikely for prices to reach this level, as some steel mills may be reluctant to accept higher manganese flake prices as the market enters its slow summer season in June.