Manganese Metals Flakes price rises again in China

BEIJING (Asian Metal) 7 Aug 09 - Manganese price rebounds again from around RMB14,000/t (USD2,050/t) ex works as the suppliers are reluctant to sell while more tenders come from downstream buyers. Most smelters claim they have low stocks at hand and raise the offer to RMB14,300/t (USD2,094/t) ex works.
A Hunan-based smelter with some deals to be fulfilled this month told Asian Metal that the price rebounds again in the area and they raise their offer to RMB14,300/t (USD2,094/t) ex works from about RMB14,000-14,100/t (USD2,050-2,064/t). "Supply is tight in the spot market in and out of China and as the economy recovers in the global area, participants are gaining confidence," said the source, with very few materials left this month for extra deals. The source reported that their smelter is in normal production with a capacity of 1,500tpm.
The source feels many suppliers are reluctant to sell when the market remains unstable, especially as the production cost keeps increasing with manganese ore price rising. "Some smelters or dealers may hold some stocks at hand, which would increase the flexibility of the market performance late this month, but now we don't think the inventory is huge yet." The source mainly focuses on domestic market and has no export business for long, but according to the source, it is a bit difficult for the buyers to accept a price above USD2,700/t FOB while it would be less profitable for Chinese suppliers to sell at USD2,650-2,700/t FOB than in domestic.
Another Guangxi-based smelter told Asian Metal that they released 300 tons of manganese flakes at RMB14,100/t (USD2,064/t) ex works last week and currently, the price rises a bit to about RMB14,200/t (USD2,079/t) ex works, pushed by more demand from overseas market. "We may see the market to go stable at current price level, as the increasing inventories in China may hinder the price from rising further," said the source, thinking the market is of little possibility to drop soon as the production cost is high.
The source thinks many suppliers are reluctant to make a deal in a hurry, as the future trend is not very clear. Currently, demand from overseas market is increasing due to the tight supply. They are about to sell some manganese ingot in Rotterdam but may not attract many buyers at the offer of USD3,000/t. But the source thinks the recovery of the overseas market would help to hold the manganese market from dropping too quickly in China.