Chinese manganese prices are expected by market participants to continue rising following planned production cuts by key smelters.
Five major producers, including China's largest smelter Ningxia Tianyuan, along with South Manganese Group (Citic Dameng), Guizhou Songtao Sanhe, Guizhou Wuling and Hunan Dongfang Mining, have agreed to suspend output for over 10-15 days starting from 20 March. This follows a meeting on 15 March among key producers in the manganese industry alliance, according to market participants.
The suspensions are forecast to remove 2,200-2,400 t/d of combined output from these key producers, accounting for 60-70pc of China's total production. The 15 March meeting also called on smaller producers to halt production for a month from 1 April.
Many producers began to suspend quoting prices on 16 March after the meeting, with some smelters offering as high as 17,000 yuan/t ($2,613/t) ex-works. A steel producer in Hunan yesterday failed to buy 600t of manganese lump 97pc grade with a bid price of Yn16,600/t on a delivered basis and paid by acceptance bill yesterday.
A stainless steel producer in Guangxi province issued a tender for 2,000t of flake today, while producers offered at Yn16,600-16,700/t or higher on a delivered basis, cash. The parties are negotiating final purchase prices. Prices for manganese flake were assessed by Argus at Yn16,200-16,400/t ex-works today, up by Yn200/t from 18 March and by Yn400/t from 17 March. There is further upside potential in the near future given output cuts caused by the suspensions.
