BEIJING (Asian Metal) 9 Jun 09 - Manganese price goes up again early the week with the buyers back to the market to replenish stocks. Sources reported that demand from the downstream industry remains firm while the market supply continues to be tight in the spot market. Some offers reach RMB13,000/t ex works again and suppliers are unwilling to sell in a hurry not, trying to make some high prices.
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A Hunan-based smelter with no stock at hand told Asian Metal that the offer in the area is about RMB12,800-13,000/t (USD1,871-1,901/t) ex works. "Demand is still firm in domestic market but the supply is tight," said the source, thinking that though many smelters have resumed but only in partial operation. The source believed the tight supply in spot market would hold manganese market from retreating too fast in the coming weeks even though the price failed to move up further.
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Some participants claim that up to 80% of the smelters have already resumed production, which would definitely depress the market still in relatively low demand. A Guangxi-based smelter, unwilling to sell at below RMB12,700/t (USD1,857/t) ex works, regarded the overcapacity of manganese industry the most reason for the low price of manganese metal, which stayed most of the time around its production cost level.
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The source also confirmed the export market failed to see any improvement yet. "We had an inquiry whose intention price was only around USD2,300/t CIF Rotterdam, which we could not make any profits," said the source, deciding to focus on domestic market this year where the demand is stronger and profits are higher.
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With the South China enters rainy season, the transport condition is very bad in some areas and this would also hamper the supply of manganese ore, which is another reason to the increasing price for the moment. Manganese production would slide in short of raw materials, pushing the smelters to expect for higher prices and become reluctant to sell hastily.