A group of major Chinese manganese producers have established a new company, Qingdao Manganese Series Investment, in a bid to support market prices and prevent low-price competition.
The new company will receive total investment of 1.529bn yuan ($230mn), mainly to buy and sell manganese products and other upstream and downstream products.
It will also establish a public warehouse to stockpile the metal when prices are low, according to market participants.
The investment will be paid by a yuan-based fund or other equivalent value of manganese metal, calculated at Yn16,000/t. The first investment of Yn458.7mn was paid on 31 March, and a second investment of the same amount will be paid no later than the end of April. The remainder will be negotiated among the producers and only paid by 2041.
A group of 10 key Chinese producers will invest in the new company. The country's largest manganese smelter, Ningxia Tianyuan, will contribute 47pc, while South Manganese (Citic Dameng) will pay 16.35pc. The other investors include Chongqing Wuling, Guizhou Songtao Sanhe and Hunan Dongfang Mining.
The range for 99.7pc grade manganese flake was last assessed at Yn16,700-16,900/t ex-works on 1 April, unchanged from 31 March and 30 March, as producers maintained prices in view of firm production costs. Export prices were assessed at $2,640-2,740/t fob on that day, also stable from 31 March and 30 March.
