Manganese: Ore, alloy prices underpinned by higher costs and restocking

In Q1 2021, manganese ore prices modestly recovered, primarily reflecting increasing cost pressures; especially rising logistics costs and the appreciation of key manganese ore exporter currencies, says Roskill.

For manganese alloy producers the higher ore prices translated to increased feedstock costs and this was one reason why manganese alloy prices increased modestly in Q1 2021. Outside of China, another key reason was significant undersupply, as a result of the destocking which occurred in 2020 and numerous supply constraints.

The uptick in ore prices turned downwards in April 2021 as ore supply began to increase in response to the higher prices, while Chinese port stocks remained high. This also manifested as a slight downturn in China alloy prices, although prices in the rest of the of the world (particularly in Europe) have recently trended sharply upwards due to supply constraints.

In China, the prospects of manganese alloy restocking in (which is expected with ongoing inventory drawdown) and higher costs, brings upside to ore prices and should enable Chinese alloy prices to rebound modestly.

The second quarterly update to Roskill’s Manganese: Outlook to 2030, 16th Edition Report is out now.