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| Considerable Reduction In Mn-Ore Production At Major Mines Causes To Rise Ore Price To US$7 - 8 |
| = Major Mines Are Supposed To Be Inevitable To Rise Largely Mn-Ore Price For Shipments In Q4 / 09 |
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Spot price of medium grade manganese ore (with Mn 44 - 45%) to be shipped to China has suddenly risen steeply and the current price has reached a level of US$7 - 8 per Mn 1% CIF. Following this aspect, it seems to be certain that price of manganese ore (UOM base) to be offered by major manganese mines to regular consumers for shipments in October - December quarter of 2009 will rise to a considerable extent. For a reference, the price of medium grade manganese ore settled with Chinese customers for shipments in July - September quarter is US$3.50 per Mn 1% CIF. Some of major manganese mines in South Africa have already sold out the cargoes to be shipped in October - December quarter of 2009. Also, major manganese mines in Australia have already sold out manganese ore for shipments in July - September quarter. A reduction in production of manganese ore commenced from October - December quarter of 2008 by major manganese mines has currently put a substantial effect on the market together with the rapidly improved demand and this change of the market position has now come up to the surface. The world production of manganese ore had decreased by 26% in October - December quarter of 2008 and by 54% in January - March quarter of 2009 in comparison with those reached its peak. An improvement on supply and demand of manganese ore has meant a steep rise of price for manganese ore to be imported into China and spot price of medium grade manganese ore for China during the end of July to the 1st week of August has jumped to a level of US$7 - 8 per Mn 1% CIF, which is compared with US$5.00 - 5.50 per Mn 1% CIF China prevailed in July. The quantities of manganese ore produced by four major manganese mines in the world for the first half (January - June) of 2009 were as per the table attached hereto. The total quantity of manganese ore produced by these four mines in the first half of 2009 is estimated to be approximately 3,350,000 tons, having had a considerable decrease of about 60% compared to that (8,690,000 tons) in the same period of 2008. (Note : ARM, the largest shareholder of Assmang, is scheduled to release on the 20th of August their settlement of accounts for the financial year of 2008 / 2009 and, therefore, the output of manganese ore by Assmang in the first half of 2009 has been assumed from exports of manganese ore from South Africa in that period.) The world output of crude steel in the first half of 2009 was 549 million tons, having decreased by 21% compared with that in the same period of 2008, but the world output of manganese ore in the first half of 2009 had decreased much more than that of crude steel. Apart from these major mines, the so-called third source has newly come on the market in 2007 - 2008 and its supply ability is estimated to be 1,500,000 - 2,000,000 tons on an annualized base. Accordingly, an extraordinary tightness on supply of manganese ore will not arise but the prices of manganese ore prevailed in the first half of 2009 were US$3.50 - 4.50 per Mn 1% CIF China as the levels to be a loss for these medium and small manganese mines and, therefore, the direction to rise price of manganese ore as intended by major manganese mines will be welcome by medium and small mines. Namely, major manganese mines have held a strong leadership to conduct price of manganese ore. On the other hand, owing to a steep fall of price for manganese ore (fallen to US$3.50 per Mn 1% from US$16), all of major manganese mines had reckoned a loss for the first half of 2009 and, therefore, there is a big probability that major manganese mines will aim to rise substantially price of manganese ore to be contracted for shipments in October - December quarter and afterwards and intend to revive a profitability. A top executive of major manganese mine, who came to Japan in July, said that a payable line of price for manganese ore has to be higher than US$5.00 per Mn 1%. Major manganese mines will most probably target a higher price than US$5.00 per Mn 1% CIF for medium grade manganese ore to be settled with Chinese customers for shipments in October - December quarter. |
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| last modified : Mon 17 Aug, 2009 [13:56] |
