Manganese/Chinese HC prices outperform

摘要

Prices for high carbon ferromanganese have been stagnant in many regions, with the only gains arising in China. The Chinese domestic price was pushed upwards by around Rmb1,500/t to Rmb14,500/t delivered, while the Chinese export price increased from 2,980 dollars/t to 3,050 dollars/t. Sources in China have stated that around one third of its blast furnace operations are being switched to the EAF route to reduce the impact of high coke prices on production costs, which given the logistics involved is tightening supply. The concern now is how long high carbon ferromanganese prices can stay at these levels before undergoing a sharp fall. In the US activity has been slow, due to the summer time lull. However US high carbon ferromanganese prices in the fourth quarter and next year are likely to be supported following news that the Defence National Stockpile Center (DNSC) is cutting sales of high carbon ferromanganese in order to reconfigure its stockpile. We calculate that the US currently consumes around 295,000 tonnes of high carbon ferroalloy each year and that material sourced from the DNSC has historically made up 20 percent of domestic demand. Therefore the forthcoming tightness in domestic supply is likely to drive US import prices higher as consumers become more reliant on material from elsewhere.