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Mn-Ore Price For China Has Fallen To US$3.00 Per Mn 1%
= As International Prices Of Mn Ferro-Alloys Have Rebounded, This Situation Will Change
While ferro-alloy producers of China had once contracted manganese ore at higher prices of US$4.00 - 5.00 per Mn 1% CIF China for shipments in the first half of 2004, this price situation of manganese ore for China has certainly changed in the second half of 2005 and the ore price contracted recently with some specified consumers has sporadically fallen to US$3.00 per Mn 1% CIF mainly for medium grade manganese ore. Therefore, it is clear that price of manganese ore as raw material is changing. However, prices of manganese ferro-alloys as products in the international market have turned to rise sharply from the beginning of September in Europe, the USA and East Asia ( price of silico-manganese has bottomed out and risen by US$100 per ton ) and, accordingly, a reduction of price for manganese ore as requested by China seems to have a limitation.

The demand for manganese ore has been based on the world production of crude steel and the world output of crude steel in 2005 is estimated at 1,100 million tons as an expansion of approximately 7% compared with that in 2004. The world production of manganese ore is being increased but, from a macro point of view, the current supply of manganese ore has been placed on a tight situation. Nevertheless, producers of manganese ferro-alloys in the world have decreased considerably their production of these ferro-alloys in April - June and July - September quarters of this year, in order to adjust the excessive supplies, and the world demand for manganese ore has turned to a weak tone.

On the other hand, according to the customs-statistics released in China, the unit prices of manganese ore imported into China in July of 2005 were in the range of US$3.40 - 3.70 per Mn 1% CIF, excluding that of South African ore, and these unit prices have already fallen to a certain extent.

Namely, the unit prices ( per Mn 1% CIF ) of manganese ore imported from main sources into China in July of 2005 were <> Australian ore : US$3.69 ( Mn 45% base ), <> Gabonese ore : US$3,54 ( Mn 46% base ), <> Ghanaian ore : US$3.68 ( MN 32% base ), <> South African ore : US$4.45 ( Mn 48% base ) and <> Brazilian ore : US$3.69 ( Mn 46% base ).

The above-mentioned prices of manganese ore have recently fallen to a level of approximately US$3.00 per Mn 1% CIF China. Ferro-alloy producers of China said that, when silico-manganese is exported at the current price ( US$630 per ton CIF Japan ), they have to have a substantial loss for this export. The prices of Chinese silico-manganese exported for Japan in 2 years ago were in the range of US$450 - 500 per ton CIF but, at that time, an extent of the loss for this business was US$30 - 50 per ton. However, the exportable prices of Chinese silico-manganese at present have to be charged by a loss of US$100 - 200 per ton and it is a cynical phenomenon that a steep rise of prices for manganese ore as raw material purchased by Chinese producers has caused to enlarge an extent of the loss for them in comparison with that in 2 years ago, when price of Chinese silico-manganese had been depressed.

On the occasion of that exportable price of Chinese silico-manganese has bottomed out and turned to rise from September of this year, price of this ferro-alloy to be sold to steel mills in China has coincidently turned to rise. According to an information from China, salable prices of silico-manganese for domestic market of China are RMB Yuan 5,400 per ton ( corresponding to US$665 ), in case that imported manganese ore is used by 100%, and RMB Yuan 4,900 per ton ( corresponding to US$604 ), in case that locally mined manganese ore is used by 100%. The reason, why price of Chinese silico-manganese becomes higher for usage of imported manganese ore, is due to the matter, which Red Book System ( a preferential treatment for conversion trade on consignment base ) was abolished from the 22nd August of 2005, and this abolishment has caused to raise the cost for production of silico-manganese in China.

The shippers, who export manganese ore for Japan, have contracted with Japanese consumers on manganese ore at a higher price of US$4.00 per Mn 1% FOB for high grade lumpy ore with Mn 46 - 48% to be shipped in the fiscal year of 2005 and, therefore, these shippers said that they will refuse a request by China to reduce price of manganese ore. However, the shippers of overseas countries, who have no record of the ore sale for Japan, are complying with a price level of manganese ore requested by China as the largest consuming country of manganese ore, which will match with the currently workable level of price for silico-manganese. The cost price of silico-manganese to be exported from China has been understood as US$700 - 800 per ton CIF Japan but, in view of the fact that price of manganese ore contracted by China to import has started to fall, price of Chinese silico-manganese is supposed to have a necessity to revise.
last modified : Tue 04 Oct, 2005 [11:12]
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