Manganese Ore Prices Drop Amid Weakening Demand from Chinese Alloy Producers

Key Issue: Price Cuts Reflect Slowing Demand for Manganese Ore in China
Manganese ore export prices have significantly dropped in response to reduced demand from Chinese alloy producers. Major mining companies outside China, including Eramet Comilog and South African producer UMK, have lowered their prices for November shipments, reflecting the softer market conditions. This comes after a period of price increases earlier this year, which started to reverse in September.

Price Reductions from Major Producers
Eramet, UMK, and CML Adjust Prices as Market Softens

• Eramet Comilog has reduced its price for 45% Gabonese lumpy manganese ore to $3.95 per metric tonne unit (mtu) cif China for November, down by $1.05 from October.
• UMK cut its price for South African 36% lumpy manganese ore to $3.70/mtu in October, a sharp decline from September’s $4.60/mtu.
• Consolidated Minerals (CML), operating in Australia and Ghana, has priced its 45% Australian lumpy ore at $4.25/mtu for November, a drastic drop from August’s price of $9.30/mtu.

These price adjustments reflect the ongoing trend of declining demand from Chinese alloy producers, who are scaling back due to narrower profit margins and reduced steel output.

Market Conditions and Factors Driving Price Declines
Weakened Demand and Supply Chain Disruptions Lead to Lower Prices
The decline in manganese ore prices follows a series of supply disruptions and a general slowdown in Chinese steel production. In September, South32’s Gemco joint venture in Australia temporarily halted operations due to Tropical Cyclone Megan, further tightening the supply of high-grade ore. However, despite these disruptions, the weakening demand from Chinese alloy makers and the narrowing margins in steel production have led to a price decrease.

Shift in Chinese Sourcing and Supply Dynamics
Chinese Alloy Producers Source from Alternative Markets as Prices Fall
As a result of falling prices and ample supply from Australia, Chinese alloy producers have increasingly turned to alternative sources for manganese ore. By October 10, the price for Australian 44-46% grade lumpy ore in China was priced at 42-44 yuan/mtu ($5.93-6.21/mtu), a marked drop from the June high of Yn70-73/mtu. This shift in sourcing patterns has further pressured global manganese ore prices.