<article><p class="lead">A shortage of containers and container ships from China to Europe has pushed up freight rates between the regions, lifting prices for manganese, silicon and magnesium.</p><p>The impact has been most pronounced for manganese flake. Prices have steadily risen over the past 10 days and deals as high as $1,820/t duty unpaid Rotterdam were heard. <i>Argus-</i>assessed prices for 99.7pc manganese flake rose to more than an eight-month high of $1,750-1,820/t du Rotterdam on 19 November.</p><p>Upward pressure is also building in the silicon and magnesium markets, and at such a pace that one market participant considered offers for silicon metal to no longer be valid one day after being put forward. Another European silicon market participant put China-Europe freight costs at roughly €40/t at the end of the third quarter, but now says freight costs are at around €140/t and in some cases €200/t. </p><p>One participant noted that per-container freight prices previously stood at $1,000, but that this has more than doubled, with quotes at $2,200. Producers and sellers are also expecting freight prices to rise to $3,000 per container in the near term, which would add $55/t to manganese prices.</p><p><i>Argus </i>assessed prices for 5-5-3 minimum 98.5pc Si silicon at €1,730-1,800/t ddp Europe works on 19 November, with offers on 17 November at €1,770-1,800/t ddp. Prices on 17 November stood at €1,700-1,750/t. Prices for 99.9pc magnesium rose to $2,180-2,250/t du Rotterdam on 19 November, up sharply from $2,020-2,110/t on 17 November. Market participants attributed the uptick in both prices to the jump in freight rates, as metal demand itself is static.</p><p>These movements are causing some end-users to delay purchases. </p><p>"Final users are concerned about prices — they are not going for big orders. They are just looking to buy on the short term," a silicon trader said. He added that delays in shipment from China could cause problems in the future. Other participants were only seeking back-to-back deals, and view holding stock in warehouses too much of a risk, given the rising prices. </p><h3>China's recovery tightens container availability</h3><p>China has <a href="https://metals.argusmedia.com/newsandanalysis/article/2151284">ramped up industrial output</a> in recent months, advancing its Covid-19 recovery. China's imports of <a href="https://metals.argusmedia.com/newsandanalysis/article/2156939">minor metals have increased</a>, while <a href="https://metals.argusmedia.com/newsandanalysis/article/2156557">exports have fallen</a>.</p><p>The rise in freight rates has impacted other markets outside minor metals, particularly import prices for <a href="https://metals.argusmedia.com/newsandanalysis/article/2159828">Asian ferrous scrap</a>.</p><p>Freight rates might remain elevated in the near term, with China's industrial output expected to rise next year, according to the <a href="https://metals.argusmedia.com/newsandanalysis/article/2149655">International Monetary Fund</a>, with GDP expected to grow by 8.2pc. </p><p>But the IMF does not see Europe's GDP growth levels returning to December 2019 levels next year, with many countries reimposing lockdowns to tackle the second wave of Covid-19.</p><p class="bylines">By Yusuf Khan</p><p><div class="picture"><div><span class="pic_title">Manganese flake min 99.7% du Rotterdam</span> <span class="units">$/t</span></div><img src="https://argus-public-assets.s3.amazonaws.com/2020/11/19/manganeseflakenovember2019112020054012.jpg"></div></p></article>
