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Jupiter forecasts higher manganese prices in coming months

28th May 2024

By: Marleny Arnoldi

Deputy Editor Online

     

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ASX-listed Jupiter Mines marketing head Tracey Cloete says manganese ore prices are likely to trade higher than the historical average in coming months owing to supply disruptions.

Jupiter has a 49.9% interest in the Tshipi manganese mine, in South Africa.

As the person responsible for selling Jupiter’s allocation from the Tshipi mine under a take-or-pay offtake agreement, Cloete points out that Cyclone Megan impacted on volumes from Groote Eylandt Mining Company’s (Gemco’s) manganese mining operations, in Australia.

“We have seen inventory levels draw down since November 2023 when producers in South Africa started cutting back on export volumes. We have also seen inventory levels draw down in mid-May as a result of less supply from the Gemco into China,” Cloete states.

She adds that, as inventory levels decline, prices typically trend higher owing to there being less material in China that can be consumed by plants.  

Manganese is predominately used in the production of steel, with the buyers of manganese typically being traders and manufacturers.

Producers may offer material on a spot price basis or with reference to a linked index. Some of the indices used include the seaborne manganese ore price through Fastmarkets, CRU and Platts.

All three firms are commodity research providers.

Fastmarkets issues its index on a weekly basis taking into account transactions that have occurred throughout the week or since the previous published index price.

In terms of deriving their prices each week, Fastmarkets will consult with buyers and sellers of manganese ore; transactions or deals hold the greatest weight in determining that week’s price, rather than indicators, offers or bids.

Producers in the seaborne manganese ore market typically only offer material once a month.

The portside market, comprising mainly ports in China, trades on a daily basis.

For 37% manganese content, for example, Fastmarkets issues two seaborne indices on a weekly basis, including the free-on-board Port Elizabeth price and the cost insurance freight Tianjin price (CIF).

Tianjin is the port in China where most manganese ore is exported every month.

Cloete explains that CIF includes both freight rates and insurance, while it is the responsibility of the seller to get the vessel to the nominated discharge port.

The Fastmarkets free-on-board manganese ore index for 37% manganese content has been published since 2012, with the lowest index price having been $1.32/t in November 2015 and the highest index price having been $7.96/t in November 2016.

Cloete says the price rebounded in that period owing to a number of producers having cut back on production when prices were lower than their cost of production.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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