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Manganese Matters n° 18 (Issued Oct. 15, 2015) 1The IMnI does not accept any responsibility for information, views or opinions contained in the articles reprinted in Manganese Matters, which are solely those of the publications credited.

MANGANESE MATTERSOctober 15, 2015 - Issue n° 18

Article Index 3

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Manganese Matters n° 18 (Issued Oct. 15, 2015) 4

CRU Ryan's Notes Ferroalloys Conference18-20 October 2015The Kierland, Scottsdale

31st International Ferro-Alloys Conference8-10 November 2015Location TBA

IMnI 2016 Annual Conference1-3 June, 2016The Westin Palace, Madrid

http://www.manganese.org/events/imni-event/imni-42nd-annual-conference


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ARTICLE INDEX

ASIA (OTHER) Gulf Manganese takes step towards project construction .................................................. 29/09/15

CHINA Chinese manganese ore market lacklustre amid sporadic buying ..................................... 14/10/15 China bulk ferro-alloy prices fall on lack of buying ............................................................. 14/10/15 Steelmakers cut SiMn tender prices for October, outlook shaky ........................................ 12/10/15 China manganese ore market quiet, prices unchanged ..................................................... 12/10/15 Chinese manganese ore prices stabilise ........................................................................... 09/10/15

INDIA India’s auction-only strategy criticised in report ................................................................. 14/10/15 INDIAN SiMn SNAPSHOT: Price falls on sustained oversupply; currency movements ..... 14/10/15 India Market Report - FeCr prices fall, FeSi unchanged .................................................... 08/10/15 India Market Report - manganese ore prices cut, FeTi unchanged ................................... 06/10/15 MOIL cuts manganese ore prices for Oct-Dec quarter ...................................................... 06/10/15 India Market Report - manganese ore prices set to fall ..................................................... 01/10/15

EUROPE Europe FeMn markets slip amid dearth of spot enquiries .................................................. 13/10/15 No restart in ferro-alloys production in 2015 - Skopski Leguri ........................................... 12/10/15 Europe SiMn market hits new 6-yr low .............................................................................. 09/10/15 Europe Mn alloys market unmoved, but seen vulnerable .................................................. 06/10/15

CIS

OCEANIA Hedland Mn ore exports jump more than 42pc in September ............................................ 05/10/15

AFRICA & MIDDLE EAST Prolonged NUM strike will threaten Eskom coal supplies .................................................. 05/10/15 Coal strike in S Africa unlikely to impact electricity output ................................................. 05/10/15 Power supply stability improves sharply to S Africa mines, smelters ................................. 02/10/15

AMERICAS US FeMn market holding price values, but vulnerable ....................................................... 14/10/15 Mexico manganese producer forecasts mixed Q3 results ................................................. 14/10/15 US SiMn market falls to near 6-year low ............................................................................ 14/10/15 Mexico manganese producer to build processing plant ..................................................... 09/10/15 Brazil Senate approves ferro-alloys electricity aid measure .............................................. 08/10/15 US SiMn market seen weakening further in 4Q ................................................................. 07/10/15 US FeMn seen vulnerable despite stabilising losses in October ....................................... 07/10/15 Brazil ferro-alloys energy crisis solution moves step closer ............................................... 05/10/15 Brazilian manufacturing sector continues to struggle ......................................................... 02/10/15 US Mn alloys shrug off Glencore troubles, eye fundamentals ........................................... 02/10/15 US ferro-alloys set to test new lows in Q4 2015 ................................................................ 01/10/15

GENERAL INFORMATION LME WEEK: Market surpluses and price weakness .......................................................... 12/10/15 WEEK IN REVIEW: LME week finds metal markets at historic lows ................................. 09/10/15 WEEK IN REVIEW: The butterfly that stamped ................................................................. 02/10/15 Glencore ‘financially robust’ and reducing spot risk – Barclays ......................................... 02/10/15


The 9th China Ferro-Alloys International Conference23-25 May 2012, Great Concordia Hotel - Beijing

IMnI 38 th Annual Conference June 12-14, 2012 – The Ritz Carlton - Cancun

MB 28 th International Ferro-alloys Conference November 11-13, 2012 – Intercontinental - Berlin

http://www.metalbulletin.com/EventDetails/0/4509/28th-International-Ferro-alloys-Conference.html

http://manganese.org/events/upcoming_imni_events/2012_imnis_38th_annual_conference

http://www.ferro-alloys.com/

Glencore denies solvency issues ....................................................................................... 30/09/15

STEEL NEWS US delays antidumping finding on steel imports ................................................................ 15/10/15 US steel production cuts point to continued sluggishness in alloy markets ....................... 14/10/15 Worldsteel cuts demand forecasts on China weakness ..................................................... 12/10/15 US steel exports edge up in August ................................................................................... 08/10/15 US construction output jumps almost 14pc year on year ................................................... 08/10/15 China, Japan lead drop in US steel imports ....................................................................... 08/10/15 US September auto sales make gains ............................................................................... 07/10/15 Brazil auto industry crisis deepens .................................................................................... 07/10/15 US raw steel output falls in latest week ............................................................................. 06/10/15

OHES & SCIENCE

OTHER

************************

EMM Manganese market extends losses in China ..................................................................... 15/10/15 Manganese flake prices fall on lack of spot buying ............................................................ 13/10/15 Europe Mn flake market off $100/t amid weak fundamentals ............................................ 13/10/15 Europe Mn market drifts sideways, awaits China return .................................................... 05/10/15

EMD Volkswagen shift to electric cars could boost REEs .......................................................... 14/10/15 Toyota Yaris Hybrid production marks milestone in France ............................................... 09/10/15


THE MANGANESE INDUSTRY

ASIA (OTHER) back to index

CHINA back to index

Chinese manganese ore market lacklustre amid sporadic buyingMetal-Pages 14/10/2015

There are no signs the manganese ore market is bottoming out. A number of suppliers have cut prices owing to surplus supply and lack of demand. Manganese alloy smelters continue to rely on hand-to-mouth purchases amid expectations of lower prices in the future on account of falling prices.

Prices for Australian lumpy manganese ore 46pc are the same as prices assessed on 13 October.

Some traders who are in urgent need of cash have undersold BHP’s material and only a few traders are holding prices firm for CML ore owing to high costs.

Demand for Malaysian manganese ore remains weak, so suppliers have cut offers to entice buying. Prices for Malaysian lumpy manganese ore 35pc, Fe 12pc, Si 15pc are down RMB0.3/mtu from prices last week.

The majority of manganese alloy smelters have halted or cut production amid slim profit margins and they are reluctant to hold material in large volumes. Many traders have suspended manganese ore import business owing to higher costs.

China bulk ferro-alloy prices fall on lack of buyingMetal-Pages 14/10/2015

Chinese ferro-silicon and ferro-manganese prices have lost ground in the past few days as producers have cut offer prices owing to decreased tender prices from steelmakers and thin business on the spot market.

Prices for ferro-manganese 75pc and 65pc have fallen by RMB100/t from prices assessed on 13 October.

WISCO has cut its tender prices for ferro-silicon 72pc and ferro-manganese 75pc for October delivery by RMB500/t and RMB300/t from prices in September.

A number of producers have cut prices to boost sales in the sluggish steel market, but there are no signs of the market picking up and spot buying remains slow. It is not clear when the market will bottom out.

The export market has been quiet with sporadic business. Foreign buyers are staying on the sidelines and waiting for lower prices.

Ferro-silicon and ferro-manganese prices in China will be under downward pressure in the near future, as demand from steel mills remains sluggish for the rest of 2015 due to slow economic growth.

Steelmakers cut SiMn tender prices for October, outlook shakyMetal-Pages 12/10/2015


Steel mills in China have continued to cut silico-manganese tender prices for October owing to reduced demand and oversupply, so a number of suppliers are trimming offers to entice major purchases to the spot market.

WISCO and Ansteel have cut their tender prices for silico-manganese 65/17 grade by RMB200/t from prices in September.

TISCO has cut its tender price for material by RMB150/t from last month’s price.

The tender price from Nanjing Iron & Steel Group has fallen by RMB200/t compared with September’s tender price.

Spot silico-manganese prices in China have fallen slightly due to lower tender prices from major steelmakers and limited business. Some smelters have cut silico-manganese 65/17 prices.

The steel industry in China has shown no signs of picking up in the fourth quarter as a glut of inventory has not been worked through and end-user markets such as construction and automotive remain weak. The silico-manganese market is vulnerable to further downside pressure in the near future.

China manganese ore market quiet, prices unchangedMetal-Pages 12/10/2015

Demand for manganese ore shows no signs of picking up in China and prices are unchanged. Manganese alloy smelters are relying on hand-to-mouth purchases, waiting for lower prices in the near term.

Prices for Australian lumpy manganese ore 46pc are unchanged from prices assessed on 8 October.

A number of manganese alloy smelters have been forced to suspend operations due to low prices and financial pressure. The low volume of replenishments will cause foreign suppliers to cut prices further in November. Several traders are underselling material owing to fears that prices will continue to fall in the coming days owing to a lack of consumer buying.

There is no end in sight for falling prices amid reduced demand from consumers. Importers in China have not shown any buying interest for supplementary material, but are instead waiting for lower prices in the near future.

Chinese manganese ore prices stabiliseMetal-Pages 09/10/2015

The Chinese manganese ore market has stabilised with limited deals concluded on the spot market after the National Day holiday. Many buyers are monitoring the market and waiting for prices to bottom out.

Spot prices for Australian lumpy manganese ore 46pc are unchanged compared with prices assessed on 8 October.

A lack of substantial trade volumes and only a few hand-to-mouth spot enquiries will drag prices down in October. Consumers are reluctant to hold substantial inventories owing to decreased manganese alloy prices and are staying on the sidelines, waiting for manganese ore prices to drop. A number of importers are doing back-to-back business, indicating that the market is yet to bottom out.

With thin business and oversupply, traders are looking to liquidate stocks by cutting prices in a bid to entice potential buyers back into the market. Although prices may be vulnerable to


further downside pressure, many traders note that prices are nearing a level below replacement costs.

INDIA back to index

India’s auction-only strategy criticised in reportMetal-Pages 14/10/2015

While most states in India are gearing up for auctions of iron, manganese and other non-coal mines in November, a report said that the government’s strategy to auction minerals resources would adversely impact the Indian steel industry.

The National Council of Applied Economic Research (NCAER) said that the new auction process along with the decline in global raw material prices would push up the cost of raw materials. India is losing export competitiveness due to the high unit cost of labour, capital, logistics and even raw materials, partly due to a decline in international prices of iron ore but also the new auction process in India that will push up costs of coal and iron ore, said the report.

The government strategy of auctioning minerals would bring exploration activity in the country to a halt and is likely to be detrimental to a ‘Make in India’ initiative by preventing the discovery of industrial metals including base metals and technology metals.

The Indian mining sector is also facing serious problems because of delays in the processing and granting of mineral concessions. While environmental, forestry and related clearances are major contributory factors, the main problem is the non-transparent and discretionary nature of the mineral grant system, the report said.

The report suggests that the new provision for ‘auctions only’ needs to be replaced with a system that encourages exploration with the promise of mining rights.

INDIAN SiMn SNAPSHOT: Price falls on sustained oversupply; currency movementsMetal Bulletin 14/10/2015

Key drivers - Producers cut their offers as a result of market oversupply and weak spot from overseas customers. Demand is also weak from domestic steelmakers.

- The fob price of material in US dollars fell in the last seven days on the depreciation of the Indian rupee in the first half of the week.

- Despite lower prices, Indian producers are still not competitive in the European market, with still scarce spot export demand from Asia.

Key quotes "Surprisingly there is no requirement from Europe, even though there are no measures on anti-dumping. Even Asian demand is quite weak." – Producer

"Indians are not competitive…end-users are becoming very demanding, which Indian producers cannot fulfil." – Consumer

India Market Report - FeCr prices fall, FeSi unchangedMetal-Pages 08/10/2015


India's ferro-chrome market saw falling prices this week with continued lacklustre performance of the stainless steel industry.

The Indian market for ferro-silicon remained unchanged from last week. Prices are likely to rise slightly in the coming week as Bhutanese material is in short supply. The silico-manganese market remains sluggish due to low consumer demand and the lacklustre steel market

The silico-manganese market remains lacklustre. Overall activity in the market has fallen due to low consumer demand and the sluggish steel market, with no immediate hopes of a rebound. Prices are under pressure and inventories are being reduced.

Domestic producers are expecting a price fall of almost INR500-750/t in the coming weeks. Producers are also contemplating reducing their manufacturing capacity by about 20pc since demand is so low. Some participants and analysts are of the view that producers may soon face muted demand and some plants may shut down as they will not be able to sustain production in such a volatile environment.

The export market is flat owing to no new deals taking place and exporters are waiting for the anti-dumping investigation to be complete. Exports are limited to regular clients.

The export market is unchanged since last week, according to an exporter. The demand for India-based silico-manganese has fallen and there are few new enquiries, with those coming mainly from south-east Asian and Middle East countries.

India Market Report - manganese ore prices cut, FeTi unchangedMetal-Pages 06/10/2015

The Indian ferro-titanium market for 30pc grade has been unchanged for the past couple of weeks with demand remaining low. Prices for 70pc material were unchanged this week.

India's ferro-vanadium market is subdued, with excess material in the market and few buyers.Manganese Ore India (MOIL), India’s largest ore producer, has reduced prices by 3-10pc for the third quarter (Oct-Dec) of 2015-16.

Manganese Ore India (MOIL), India’s largest ore producer, has reduced prices by 3-10pc for the third quarter (Oct-Dec) of 2015-16. Prices have fallen given reduced demand and falling manganese ore prices in global markets. MOIL has cut prices by 3pc for all ferro-grades except fines and silico-grade has dropped by 5-10pc, while prices for fines have gone down by 5pc from the previous quarter.

Prices of imported manganese ore are under pressure on the back of low demand for manganese alloys. Indian manganese-alloy prices are down by as much as INR 4,000/t in the past three months, while prices for silico-manganese have corrected by INR 2,000/t due to continued weakness in the export and domestic markets. Indian demand for imported manganese ore has fallen sharply as alloy plants are operating at very low capacities.

The price for 36-37pc South-African carbonated ore has fallen, and Gabon has also reduced its price.

A producer said that ore was freely available but there were no takers as steel fundamentals were weak. There was excess supply of raw material compared to the final alloy product, pushing ore prices down.

MOIL cuts manganese ore prices for Oct-Dec quarterMetal-Pages 06/10/2015


Manganese ore major, MOIL has cut its quarterly prices for manganese ore by about 10pc for the October-December quarter, said an industry source.

The company has reduced its quarterly prices for ferro-grade ore, silico-based grade and fines in the range of 3pc to 10pc considering the lukewarm demand for manganese ore globally. MOIL cut its manganese ore prices for the July-September quarter by about 3-12.5pc owing to subdued demand for manganese alloy.

MOIL will release more details about its prices in the next few days.

Steel fundamentals are gloomy resulting in reduced buying capacity for manganese alloy. A manganese alloy producer source expects manganese ore demand from the alloy sector to remain subdued in the current quarter.

India Market Report - manganese ore prices set to fallMetal-Pages 01/10/2015

India's market for ferro-manganese is weak and consumer demand is low. Producers have been reducing prices and offering long-term payment options to attract buyers.

Indian ferro-chrome prices have fallen this week as consumer buying has fallen. Indian manganese ore prices are likely to fall in the coming month. Some ore producers are offering lower prices, but most are awaiting MOIL's price announcement for the third quarter as the company's quarterly benchmarks define the overall Indian market trend.

Ferro-manganeseIndia's ferro-manganese producers have been grappling with reduced demand from steelmakers by cutting prices and offering long-term payment options to attract buyers. Bulk volume buyers are able to get cheaper deals as every producer is vying for the business.

But consumers are not interested in stocking up even at low prices as there is still no sign of improvement in steel fundamentals.

The same weakness is seen in export markets as in the domestic market in India, and prices have come down by around $15-25/t from last week. Most Indian ferro-manganese production is destined for export, since the domestic market is slow, but given the current weakness in export markets, producers said the sales environment is turning from bad to worse.

Manganese oreIndian manganese ore prices look likely to fall in October. Some ore producers are already offering lower prices, but most are waiting for MOIL to announce its third quarter prices that serve as a benchmark for the rest of the market. MOIL is expected to reduce its manganese ore price in view of low demand and the prevailing offer prices in India for imported manganese ore.

The prices of imported manganese ore are falling as demand is low from alloy producers and ore is available from Australia and South Africa.

Indian demand for ore has fallen considerably as alloy producers have cut production capacity given the low demand for manganese alloys. Steel markets are slow and overall metal demand is down. Most market participants expect India's total output of manganese alloys to remain at currently reduced levels, which means demand for ore will also remain depressed.

CIS back to index


EUROPE back to index

Europe FeMn markets slip amid dearth of spot enquiriesMetal-Pages 13/10/2015

European ferro-manganese suppliers have cut their spot offer prices amid nominal business levels, as the ferro-alloys markets struggle to hold values amid a weakening steel sector. Ferro-silicon in Europe is mostly a producer market that deals directly with steelmakers, although there have been a couple of isolated deals on a spot basis, according to industry sources. The spot market has been unmoved in the past six months, according to Metal-Pages' data.

European manganese alloys producers are operating at near full production and have been making material available on the spot market. Indian exporters offering high carbon ferro-manganese, but domestic producers are dominating the market in Europe, such as Eramet, Glencore, as well as Privat from Ukraine. In general steel demand is decreasing in Europe and raw materials prices are seen weaker, sources said. Steel cuts The European ferro-manganese market is currently being weighed on weaker demand from European steel demand, which has been cutting finished steel prices and making hefty production cuts in the UK, Turkey and Eastern Europe. In the UK major steelmaker SSI risks losing its 2.5mn t/y blast steel-making furnace after going into liquidation a couple of weeks ago, while there are reported steel production cuts and closures in Turkey. In Europe, Vitkovice Steel has shut its steel plant in the northeast of the Czech Republic as planned after deciding that needed investments will be too costly, the company said late last month. The firm said it will replace the lost production after the closure with deliveries from European and Russian suppliers. The shuttered steel plant had annual production capacity of 950,000t of liquid steel. Czech steelmakers produced 5.36mn t of steel in 2014, according to industry data.

No restart in ferro-alloys production in 2015 - Skopski LeguriMetal-Pages 12/10/2015

Macedonian manganese ferro-alloys smelter Skopski Leguri will not be restarting production of ferro-alloys this year due to weak fundamentals in Europe, chief operating officer Yuri Rioneli told Metal-Pages. Skopski Leguri has three ferro-alloys furnaces, with two making silico-manganese and high carbon ferro-manganese at a monthly production capacity rate of 5,000t. A third furnace has a monthly production capacity of 330t of ferro-nickel. Current European prices for manganese alloys in Europe are not strong enough to sustain production, he said. Producers such as Eramet, Glencore and Ferroatlantica would lose money based on current European spot manganese alloys prices, but can compensate with production on other metals and alloys products, Rioneli said.


Skopski Leguri in early 2016 will look again at the possibility of restarting production, but much will depend on a bounce in manganese alloys prices. The company shut the plant in October 2013 after initially extending its summer maintenance in July and August that year for a couple of weeks. Raw & Refined Commodities is the sole and official seller of ferro-alloys from Skopski Leguri. The plant has no stockpiled material. Skopski traditionally sells its product to customers in central and eastern Europe, CIS countries, the US and Turkey. Although Skopski Leguri is a manganese alloys production plant any restart to production is likely be silico-manganese as that market not as well supplied as ferro-manganese, according to Rioneli.

Europe SiMn market hits new 6-yr lowMetal-Pages 09/10/2015

The European silico-manganese spot price has dropped to a new low last reached in June 2009 and seen falling further amid low key demand and readily available supplies. European ferro-alloys producers are following demand down, with further price falls seen as a developing trend through the current quarter. The current price is seen below production costs, which may offer some support through the rest of the fourth quarter, although suppliers may get aggressive as import offers persist. European suppliers are expected to increase liquidating their stock levels through the final quarter of the year as they square their order books and book profits and generate cash flow ready for New Year business. Slovakian ferro-alloy producer OFZ has been offering silico-manganese on the spot market, while there is South African material available in warehouses in Europe, according to industry sources. The European market has been indicated below €700/t for the first time since May 2009. ImportsImport offers from India have increased recently. Indian exporters have been encouraged to increase their level of offers to the EU after the European Commission decided to not impose preliminary anti-dumping measures on India. The Commission will instead take a longer term view of the investigation until March 2016 when it will ultimately decide to impose, or not, definitive measures. Indian exporters had been keen to offload material to Europe ahead of those expected preliminary measures.

Europe Mn alloys market unmoved, but seen vulnerableMetal-Pages 06/10/2015

European manganese alloys have moved steadily again in the past week, with a dearth of business in a market where consumers are using their stock levels delivered in longer term contracts. Little is seen changed in coming weeks. The potential impact of a fall-out at troubled mining and trading company Glencore has been dissipating as the company's share price has been recovering since falling to a record low late last month. There has been strengthening investor sentiment that there is more solvency in Glencore, which may be in talks to sell its agricultural assets, a move that may cut its debt burden, according to reports. Separately, European steelmakers have been opting to settle their raw materials intake in monthly deals of ferro-alloys instead of quarterly delivery contracts due to weakening fundamentals. Even so, there have been only isolated deals.


There are three basic grades of ferro-manganese; high carbon, medium carbon and low carbon ferro-manganese, according to its carbon content. Steelmakers use those grades separately or in combination. Troubled steel sectorThe world steel industry is facing bleak times and any smelter closures already in prospect look unlikely to be enough to restore profit margins. Last week Britain's second-biggest steelmaker SSI UK fell into liquidation, citing a slump in European steel prices and record exports from China, which produces half the world's total annual steel production. South Africa's second-biggest steelmaker Evraz Highveld Steel and Vanadium is in business rescue proceedings, while Tata Steel and US Steel Corporation have cut production capacity this year. Less than half of the world steel industry can make money at current prices, according to industry sources. Some 700mn t out of a total 2.3bn t of steelmaking capacity is unused at present, with cuts of 400-500mn t needed by 2020 to balance the market. But about 300mn t of that spare production capacity is in China and cutting that has political and economic ramifications, much like the metals sectors that feed it, such as manganese, magnesium and ferro-alloys. CISA (China Iron and Steel Assn) is expecting Chinese steel exports will exceed 100mn t in 2015, after surging 50pc in 2014 to 94mn t. That flood of cheap Chinese steel has dragged down world steel prices to decade lows.

OCEANIA back to index

Hedland Mn ore exports jump more than 42pc in SeptemberMetal-Pages 05/10/2015

Manganese ore shipments from Port Hedland in Australia totalled 148,500t in September 2015, a jump of 42.8pc from 104,000t shipped the month before, according to the latest monthly data from the Port Hedland Port Authority. All shipments were sent to China in September 2015, unchanged from August. Port Hedland handles manganese production from mines owned by BHP Billiton, Fortescue Metals Group and Atlas Manganese in the ore-rich Pilbara area of Western Australia.

AFRICA & MIDDLE EAST back to index

Prolonged NUM strike will threaten Eskom coal supplies Mining Weekly 05/10/2015

Eskom does not expect the National Union of Mineworkers’ (NUM’s) strike in the coal sector to have an immediate effect on its coal supplies, but prolonged industrial action will deplete the power utility’s stockpiles.

Over 30 000 NUM members went on strike on Sunday after NUM and affected coal companies – Anglo Coal, Glencore, Delmas, Exxaro Coal, Kangra and Msobo – could not reach an agreement over NUM’s demand for R1000 for the lowest category and 14% for the artisans, miners and officials.


The Commission for Conciliation, Mediation, and Arbitration issued a certificate of non-resolution to the dispute between NUM and the companies last week.

A protracted strike could see the return of Eskom’s coal problems as its coal supplies will be depleted, threatening the utility’s ability to supply power.

On Monday, Eskom said there is no immediate threat to power supply as most of its coal-fired power stations have stockpiles of over 30 days.

Spokesperson Khulu Phasiwe said in the event of the strike continuing for too long, Eskom could tap into the coal reserves kept by the various mining companies. “However, that is not ideal because we will have to truck the coal. Secondly, it will be costly. Hopefully the strike will end very soon,” Phasiwe said.

Low stockpiles and poor coal at Eskom power stations were among the main reasons for the 2008 power supply crisis.

Immediately after the 2008 power shortages Eskom took steps to increase coal stockpiles from under 10 days. These included buying coal, at relatively high prices, on short-term contracts.

The coal strike could, therefore, bring back days of low stockpiles.

Coal strike in S Africa unlikely to impact electricity outputMetal-Pages 05/10/2015

Eskom, South Africa’s embattled state-owned power utility, has reassured electricity users that a strike by up to 30,000 coal miners is unlikely to impact its power generation unless it lasts for more than two months.

Coal miners belonging to the National Union of Mineworkers began a strike yesterday in search of higher wages and better working conditions, affecting mining companies such as Glencore, Anglo American and Exarro Resources.

Eskom spokesperson Khulu Phasiwe said on Monday the utility’s coal-fired power stations have significant coal stockpiles, enabling them to weather strike action at coal mines. Apart from the Koeberg nuclear power station near Cape Town, all of Eskom’s power stations are coal-based.

Industrial power users in South Africa are currently enjoying a welcome respite from power outages as Eskom becomes more successful at balancing the supply and demand equation of the national grid.

Between November last year and August this year, regular load-shedding was imposed, causing many mining and metals companies to lose production. Just last month, International Ferro Metals cited losing 10pc of its local ferro-chrome output due to load-shedding in July as a factor in its decision to place its chrome and ferro-chrome operations into business rescue.

While there are strong expectations that the coal strike will be resolved within days or weeks, the South African economy is still reeling from the impact of last year’s five-month strike which crippled the platinum industry between late January and early June last year.

One of the central demands being made by the NUM is for the lowest paid workers to receive a monthly pay hike of R1,000 rand ($74). Employers are offering wage increases of around 8.5pc.

Meanwhile, two of South Africa's major gold mining companies - AngloGold Ashanti and Harmony - have reached a three-year wage agreement with unions, although another major producer, Sibanye, is still in negotiations.


Power supply stability improves sharply to S Africa mines, smeltersMetal-Pages 02/10/2015

Electricity supply to South African mines and smelters has improved sharply over the past two months with state power utility Eskom now into its 52nd day without imposing power outages.

Apart from one day in this period – 17 September – when there was a problem related to supply from the Cahora Bassa hydroelectric scheme in neighbouring Mozambique – Eskom has been able to balance power supply and demand for industrial users and the rest of the country.

According to Eskom, it has caught up with much of its power station maintenance backlog. It has also been aided by 800MW entering the grid from one unit of the Medupi power station, which still has another five units to unveil.

Also assisting Eskom in its balancing act is the fact that at least ten power-hungry ferro-manganese smelters are on care and maintenance as well as two ferro-chrome furnaces. While the ferro-manganese smelters have been suspended due to weak manganese prices, electricity outages in July were partly responsible for the two ferro-chrome furnaces being taken out of commission.

Between November last year and August this year, South African mines and smelters were hit by regular load-shedding. Some companies lost as much as 10pc of their output due to power cuts in July.

It appears that the new chief executive, Brian Molefe, who was only last month appointed in a permanent capacity after an acting period of a few months, has made a big difference to the stability of power supply.

But although electricity supply has stabilised, there are still big concerns in South Africa about power price increases. Industrial power tariffs have risen by around 270pc since 2007 and Eskom is expected to again seek a double digit tariff increase next year.

AMERICAS back to index

US FeMn market holding price values, but vulnerableMetal-Pages 14/10/2015

The US spot ferro-manganese market has been spared losses so far in October unlike its sister alloys silico-manganese and ferro-silicon, but downward pressures are looming amid as minimal demand is expected in the coming weeks. The US spot high carbon ferro-manganese market has drifted down steadily in 2015. Current spot prices are now around an average low last seen in January 2007. There have been a few spot deals done earlier in October for between 20 and 100t for near term delivery at the bottom end of the current price range. But steelmakers appear content with their longer term contracted intake of raw materials and with a neglected spot market looking likely in coming weeks, price losses are expected. Dealers have reported warehouses brimming with stock levels of ferro-alloys in Pittsburgh, Pennsylvania, Ohio, Baltimore and Chicago. More warehouse space is seen needed in the near term to store more ferro-alloys supplies on the way. Material is being shipped from


Australia, South Africa and South Korea, depending on grade, while there is also smaller amounts being produced domestically. US refined alloys are selling at some 20pc premium to high carbon material due to more expensive production costs, although business has been similarly low level this year.

US steel production capacity utilisation is some 71pc and expected to fall to around two-thirds in the next couple of months, according to industry sources. End-user consumptionFinished steel demand across the North American Free Trade Agreement (NAFTA) area is expected to shrink 2.7pc in 2015 to 140.8mn t, but 2016 should see growth of 2.1pc to 143.7mn t, according to the latest data from industry body the World Steel Association. The car sector is among the key end-user segments that will drive modest US demand growth in 2016. Car production is expected to be between 17.6mn units and 17.9mn units next year, up from about 17.2mn in 2015. In construction, the US commercial sector has been showing slow, but steady strengthening, with about 5-6pc growth this year, from 2014. But the US energy sector is expected to extend its sluggish performance in the medium term. World steel consumption is expected to drop 1.7pc to 1.51bn t this year due to slower economic growth in China, the world's biggest producer and consumer of steel. The world steel sector is seen having low growth until other major developing economies start to strengthen considerably.

Mexico manganese producer forecasts mixed Q3 resultsMetal-Pages 14/10/2015

Autlan, North America's biggest manganese producer has said it expects to see a slight pick-up in third ferro-alloys shipments and a strong improvement in performance for its mining division compared with the same period last year.

Without specifying details, the Pedro Garza García, Mexico-based company said it expects ferro-alloys shipments to increase by 1pc and mining division shipments to rise by 36pc in the company's now customary guidance ahead of quarterly results.

But at the same time overall sales revenues are forecast to fall by 7pc, pushing earnings before interest, depreciation and amortisation (EBITDA) down by around 26pc, led by lower manganese and ferro-alloys prices.

Autlan has highlighted oversupply on global steel markets, led by overproduction mainly in China and also the postponement of infrastructure projects in Mexico, among the reasons for reduced orders and lower prices.

Last week Autlan said it plans to offer a range of manganese concentrate grades as it outlines plans to build a new processing plant in Mexico. The move is part of a five-point, five-year investment plan worth $300mn aimed at making Autlan one of the world's lowest cost producers. The company aims to become self-sufficient in manganese, cutting costs by replacing imported minerals, while reducing raw materials and energy consumption.

Autlan's energy division plans to increase generation capacity through investments in hydroelectric projects such as the Atexcaco plant in Puebla state and wind power, aiming to generate enough energy to cover the company's own needs, while putting spare electricity on the market.


US SiMn market falls to near 6-year lowMetal-Pages 14/10/2015

The US silico-manganese spot market has fallen due to a lack of demand with the trend seen as persisting as steelmakers are well covered through the current quarter. Most US steelmakers are covered for their raw materials needs through the fourth quarter, while being on formula-based contracts. The weakening spot price aids the buyer on formula deals. Such rates are partly agreed on how market prices accrue through the length of the contract, which starts on the effective date before being paid at the end. An expected bounce in the spot market demand has failed to happen since the seasonal slowdown and prices are expected to drop further through the quarter. Suppliers will be keen to offload their stock levels as storage costs are more expensive than selling at a loss. It is unclear how weak US spot prices may get. Underlying consumptionThere was hope the tubular and pipe sector would not crash as much as it did. In the short term prices appear vulnerable to losses given persistent cuts in steel production, but support is seen in the longer term due to the expected impact of trade cases against cheaper-priced steel imports, which should strengthen domestic steel production and consumption of raw materials. US Steel said recently it may temporarily idle its Granite City Works steel mill, blaming tough market conditions, fluctuating oil prices, reduced (oil) rig counts, depressed steel prices and unfairly traded imports. The steelmaker said it is considering idling the plant as part of a consolidation of its North American flat-rolled operations. The Granite City plant is a prime supplier of steel to US Steel’s Lone Star Tubular plant in Texas, which makes pipe for the oil industry. Oil rig counts have halved in the past 12 months, cutting demand for pipe, as the price of oil fell to currently around $48 a barrel, from $107/barrel in June 2014. Most of Granite City’s steel production is used in pipe, although the plant also makes steel used in appliances and other industries. US Steel has also blamed part of its troubles on a surge in imports. The US International Trade Commission last month found evidence that US pipe producers are being injured on imports from South Korea, Mexico and Turkey. In the US, steel demand is forecast to dip 3pc to 103.8mn t in 2015, and return to growth of 1.3pc in 2016, reaching 105.2mn t according to data from industry association Worldsteel this week.

Mexico manganese producer to build processing plantMetal-Pages 09/10/2015

Autlan, North America's biggest manganese producer, has said it will offer a range of manganese concentrate grades as it outlines plans to build a new processing plant in Mexico.

The move is part of a five-point, five-year investment plan worth $300mn aimed at making Autlan one of the world's lowest cost producers. The Pedro Garza García, Mexico-based company aims to become self-sufficient in manganese, cutting costs by replacing imported minerals, while reducing raw materials and energy consumption.


Autlan's energy division plans to increase generation capacity through investments in hydroelectric projects such as the Atexcaco plant in Puebla state and wind power, aiming to generate enough energy to cover the company's own needs, while putting spare electricity on the market.

In July Autlan said it expects to adjust production levels for mining and ferro-alloys operations in the second half of 2015 according to fluctuations in demand as it waits for a recovery in the steel market.

Autlan highlighted oversupply on global steel markets, led by overproduction mainly in China and also the postponement of infrastructure projects in Mexico, among the reasons for reduced orders and lower prices.

To reduce a dependency on steel markets, Autlan executives are seeking to move into precious metals, other raw materials and mineral industries, a process that started this week when the company took a minority stake in an unnamed gold project in Mexico's Sonora state.

Brazil Senate approves ferro-alloys electricity aid measureMetal-Pages 08/10/2015

A solution to an energy crisis faced by ferro-alloys, silicon metal and manganese producers in Brazil's southwest and central west states has moved closer after lawmakers in the country's Senate voted to approve an amendment to provisional measures aimed at helping them.

It follows a similar vote on the matter in Congress last week.

The unwillingness of utility companies to extend contracts beyond their expiry date and instead chase much higher prices from the creaking national grid system on the open market has affected producers across Brazil.

Ferro-alloys producers in Brazil's southern Minas Gerais state have slashed and in some cases suspended production after regional utility Cemig declined to renew electricity contracts at the end of 2014.

Under the amended measures funds will also be set aside to help companies in the southeast and central west. A degree officially authorising the measure is due to signed before the end of October.

The measures originally covered ferro-chrome and ferro-silicon producer Ferbasa as part of a group of industrial companies in Brazil's northeast.

Facing severe disruption to its energy supplies Ferbasa was forced to implement a contingency plan, including the stockpiling of 104,000t of ferro-alloys and the buying in of 30pc of its energy needs from early 2016.

Provisional measures published in late June saw regional utility Chesf agree to supply Ferbasa with the bulk of its electricity supplies until 2037.

With trade organisation ABRAFE having held talks and lobbied with the aim of securing a similar deal the implementation of measures will be welcomed by companies such as: Anglo American, Bozel, CBMM, Dow Corning Eletroligas, Ferlig, Granha Ligas, Inonibrás, Liasa, Ligas Gerais Eletrometalurgia, Maringá, Minasligas, Nova Era Silicon, Rima and mining giant Vale.

US SiMn market seen weakening further in 4QMetal-Pages 07/10/2015


The US silico-manganese spot market has dropped in October due to cheaper offer prices against weak demand, which is seen as a developing trend through the rest of 2015. There was hope the tubular and pipe sector would not crash as much as it did. The recent settlement of almost three thousand tonnes of alloy to steelmakers Nucor and Steel Dynamics has dragged down the spot market. Support is seen coming in the longer term, probably 2016, from trade cases against imports of steel that uses silico-manganese that were concluded this week. The US Department of Commerce on 6 October unveiled remedial tariffs on imports of steel used in oil and gas pipelines from South Korea and Turkey that were targeted in trade cases lodged by a coalition of US steelmakers. Welded line pipe imports from both exporters were found to be sold in the US at unfairly low prices, prompting the agency to set anti-dumping margins ranging from 2.53-6.19pc for South Korea and 6.66-22.95pc for Turkey. And late last month US Commerce set preliminary duties of 11.93pc on silico-manganese from Tasmanian Electro Metallurgical Company (TEMCO), which typically accounts for about a fifth of total annual US supplies. A final decision from Commerce on the duties is due in December 2015. The duties are seen adding about 5¢/lb to TEMCO material. In 2014, imports of silico-manganese from Australia were valued at an estimated $76.9mn. Weaker 4Q 2015But silico-manganese price weakness is expected to persist until the end of 2015, with the market vulnerable to below 40¢/lb by year-end holidays. Whenever a tender emerges in the spot market, suppliers are competing aggressively for business, undercutting each other's bid offers, sources said. Dealers typically square their financial accounts and try to clear their order books around the end of each calendar year, which means that suppliers try and run down their inventories as low as possible to generate cash flow for New Year business, while booking as much profit as they can. The pace and strength of volume of those offers is expected to increase in the coming weeks, and prices may even test the annual average low of July 2009.

US FeMn seen vulnerable despite stabilising losses in OctoberMetal-Pages 07/10/2015

The US spot ferro-manganese market is expected to be vulnerable to losses in the coming weeks despite stabilising losses in October after slipping on weak demand in the past quarter. Buying activity has been sparse in general, with steelmakers content with their intake settled in longer term contracts. US steel production capacity utilisation, currently around 72pc, is expected to fall to around two-thirds in the next couple of months, according to industry sources. That is expected to have a dragging effect on spot bulk alloys prices. The US spot high carbon ferro-manganese market has drifted down steadily in 2015. Current spot prices are now around an average low last seen in January 2007. Dealers have reported warehouses brimming with stock levels of ferro-alloys in Pittsburgh, Pennsylvania, Ohio, Baltimore and Chicago. More warehouse space is expected to be needed in the current quarter to store more ferro-alloys supplies on the way. Material is being


shipped from Australia, South Africa and South Korea, depending on grade, while there is also smaller amounts being produced domestically. US refined alloys are selling at some 20pc premium to high carbon material due to more expensive production costs, although business has been similarly low level this year.

Brazil ferro-alloys energy crisis solution moves step closerMetal-Pages 05/10/2015

A solution to an energy crisis faced by ferro-alloys, silicon metal and manganese producers in Brazil's southwest and central west states has moved a step closer after lawmakers in the country's congress voted to approve an amendment to provisional measures aimed at helping them.

The unwillingness of utility companies to extend contracts beyond their expiry date and instead chase much higher prices from the creaking national grid system on the open market has affected producers across Brazil.

Ferro-alloys producers in Brazil's southern Minas Gerais state have slashed and in some cases suspended production after regional utility Cemig declined to renew electricity contracts at the end of 2014.

Under the amended measures funds will be set aside to help companies in the southeast and central west, although proposals must be approved by Brazil's senate before they can be signed into force by president Dilma Rousseff.

The measures originally covered ferro-chrome and ferro-silicon producer Ferbasa as part of a group of industrial companies in Brazil's northeast.

Facing severe disruption to its energy supplies Ferbasa was forced to implement a contingency plan, including the stockpiling of 104,000t of ferro-alloys and the buying in of 30pc of its energy needs from early 2016.

Provisional measures published in late June saw regional utility Chesf agree to supply Ferbasa with the bulk of its electricity supplies until 2037.

With trade organisation ABRAFE having held talks and lobbied with the aim of securing a similar deal the implementation of measures will be welcomed by companies such as: Anglo American, Bozel, CBMM, Dow Corning Eletroligas, Ferlig, Granha Ligas, Inonibrás, Liasa, Ligas Gerais Eletrometalurgia, Maringá, Minasligas, Nova Era Silicon, Rima and mining giant Vale.

Brazilian manufacturing sector continues to struggleMetal-Pages 02/10/2015

Business conditions across the Brazil's manufacturing sector worsened for the eighth month running in September as orders of raw materials and semi-manufactured goods from the country's goods producers continued to fall, a Markit survey shows.

New orders contracted in September for the eighth successive month with manufacturers of intermediate goods hardest hit by weaker demand. The domestic market remains the main source of weakness, with export business unchanged after five months of falls.

Companies continued to shed jobs and reduce inventory levels in September, although input and production costs rose at weaker rates.


While stocks of purchases decreased further, the rate of depletion was the slowest in three months. Inventories of finished goods declined at a weaker pace.

Markit's seasonally adjusted Brazil Purchasing Managers’ Index pointed to a weaker, although still marked deterioration in overall trading conditions with a rise to 47.0 in September from 45.8 in August. The index averaged 46.7 in the third quarter of 2015, edging up from 46.1 in the previous three months.PMI indices are an indicator of the economic health of the manufacturing sector, taking into account new orders, inventory levels, production, supplier deliveries and the employment environment.

A PMI score of more than 50 represents expansion of the manufacturing sector, compared with the previous month. A reading under 50 represents a contraction while a reading at 50 indicates no change.

US Mn alloys shrug off Glencore troubles, eye fundamentalsMetal-Pages 02/10/2015

The US manganese alloys markets are focussing on the fundamentals of supply and demand for the time being instead of the potential impact of any fall-out from a sell-off in Glencore stock levels, according to industry sources. US manganese alloys spot prices are holding moving into the last quarter of the calendar year, but cheaper offer prices amid business inactivity are expected in the near term, with prices set to test new multi-year lows. The US high carbon ferro-manganese prices have stabilised. US dealers said that while the situation at manganese alloys maker Glencore, which is troubled with debt issues at present, is being watched, market sentiment is more focussed on the fundamentals of supply and demand. Glencore supplies manganese alloys to the US, sources said. It usually ships manganese ore from Brazil (Vale) and makes manganese alloys at its European operations in France and Norway, they said. There may be an impact on manganese ore prices if Glencore decides to cut purchases from Brazil's Vale. If so, there may be a knock-on effect to manganese alloys markets in the West, although Glencore has denied having any liquidity trouble. The spot silico-manganese has been quiet. After longer term deals have been settled the spot market is expected to be very quiet as US steel production utilisation rates are seen running at only two-thirds of capacity in the current quarter. Underlying consumption in silico-manganese will be at a low level in coming months as the construction sector enters it quietest time of the year, while the tube and pipes sector, another key consumer of silico-manganese steel has seen most projects cancelled or postponed due to weak oil and gas prices. Underlying consumption in the ferro-manganese market should also be quieter, with the car sector also going through its quietest time. Manganese alloys suppliers are expected to increase their offers to the spot market before January, with heavy industry traditionally looking to square their financial accounts and book profits after cutting stock levels as low. US refined alloys are selling at some 20pc premium to high carbon material due to more expensive production costs, although business has been similarly low level this year. South Korean exporters have been selling low carbon ferro-manganese to the US at present spot price levels.


US ferro-alloys set to test new lows in Q4 2015Metal-Pages 01/10/2015

Ferro-alloys markets in the US are expected to test new multi-year lows in the fourth quarter of 2015 due to material oversupply and depressed demand in the domestic steel sector, according to industry sources.

Silico-manganese is seen dropping, with high carbon ferro-manganese down. Silico-manganese and ferro-silicon were last at those levels in mid-2009, while such a drop in standard grade ferro-manganese would mark a return to a level last seen in mid-2006. "In July (2015) we said the markets cannot get any worse, but then in August they did," one dealer said. "Then in August we said the same thing, but then in September they (domestic ferro-alloys prices) did. We were putting the slump in prices on par with what happened in 2009, the year after the financial crash, but if anything it's getting worse." Peaks and troughs The alloys are some way off their price peaks this decade. Manganese alloys have almost halved in price, while ferro-silicon has slumped about 40pc. Before then, the US ferro-alloys markets slumped through the second half of 2008 and the first half of 2009, the result of the financial crisis in the West. But when the markets seemed to hit a price floor in 2009, it really was a bottom for them and the only way was up, industry sources said. Moreover, the markets jumped and slumped to the same levels in only two years. The current spot ferro-alloys price slide, which started from weaker levels, will be longer by a few months and with a fraction of the business volumes. Soft fundamentalsThe current fundamentals of US ferro-alloys markets are soft. In terms of consumption, US steel production capacity utilisation is expected to fall to 67pc by December, from above 80pc in August this year. Warehouse are stocked full of ferro-alloys in Pittsburgh, Pennsylvania, Ohio, Baltimore and Chicago. Some warehouses are at record peak levels of ferro-alloys, industry sources said. Some warehouses have been forced to use additional space unused in recent years to accommodate ferro-alloy stocks. Some warehousing companies have even bought new space, or are building new space, ready to store the seemingly relentless inflow of ferro-alloys. As it is expensive to have material warehoused, which incur storage and insurance costs, most suppliers are expected to offload their stored material until January, particularly as they will soon be due to square their financial accounts and book as much profits as they can by the end of the calendar year. Metals suppliers tend to try and have as little material on their books at the start of the New Year after generating as much cash flow as they can to arrange their business needs according to new supply and typically firmer 1Q demand. The worst of the ferro-alloys price falls are seen happening in November and December as the majority of people with material in-warehouse have financial capital reasons to book as much money as they can by January. Whatever they do not sell by that point, they are expected to write-down, meaning they are unlikely to be as desperate to sell in the Spring. New Year recovery


But market sentiment and the tone of business activity is expected to change around the turn of the year. Anti-dumping suits against ferro-alloys and steel, as well as 2016 being a US presidential election year when new manufacturing and infrastructure projects are typically announced, are seen boosting buying interest in metals markets. Last month US Commerce set preliminary duties of 11.93pc on silico-manganese from Tasmanian Electro Metallurgical Company (TEMCO), which typically accounts for about a fifth of total annual US supplies. A final decision from Commerce on the duties is due in December 2015. The duties are seen adding about 5¢/lb to TEMCO material. In 2014, imports of silico-manganese from Australia were valued at an estimated $76.9mn. There are also pending US preliminary anti-dumping measures against steel imports due in November 2015 and July 2016. If found in favour of the domestic steel sector, raw materials such as bulk alloys should benefit as US steel production is likely to increase to compensate for the expected fall in imports. Ferro-alloys prices are seen increasing in the first quarter of 2016 as there should be no cash crunch and no expensively priced material, with suppliers able to compete for business on an even keel. Consequently, suppliers are expected to push up their offer prices instead of trying to compete with ever cheaper offers. That will allow US market dealers to form a proper business plan through 2016, something that present market conditions hardly accommodate. Inward supplies of bulk alloys to be warehoused are also expected to level off, and there is already evidence of that rate slowing most recently, sources said. Whatever amounts arrive in storage in the first couple of months of 2016 are likely to have been sold for the year. Underlying issueLonger term, though, a huge world surplus in steel production capacity, particularly in China, will have to be tackled for the world market to achieve a relatively healthy balance between supply and demand. As things stand, if world steel production were limited to only China there is enough material from there plus what is already stockpiled internationally to meet world demand until 2018, according to industry sources. Total annual world steel production capacity is some 135mn t in the US, although some estimates suggest it is closer to 105mn t. In comparison, China has about 870mn t of annual steel production capacity.

Yet as recently as 1998 the US produced more steel than China.

GENERAL INFORMATION back to index

LME WEEK: Market surpluses and price weaknessMetal Bulletin 12/10/2015

Market oversupply and weaker demand have plagued the metals markets in 2015. Prices were pushed to multi-year lows over the summer, leading to calls for meaningful production cuts from the world’s miners.It’s a guaranteed topic for discussion at LME Week. Here is the state of play as we head into the biggest event in the metal markets calendar.

In the ferro-alloys markets, production cuts and interruptions have so far had no sustained positive effect on prices.


Manganese ore prices fell again on Friday October 9 as Chinese market participants returned from the Golden Week holiday.

It is now almost a year since UMK’s Johan Kriek predicted "15 years of depressed manganese ore prices" at Metal Bulletin’s 30th International Ferro-alloys Conference and his comments are now talked about as a prophecy.

In this oversupplied market, there is no floor in sight, especially considering the offer levels submitted on Friday to Metal Bulletin’s 37% Manganese Ore Index, which came out down 4 cents on the previous week.

"No one is cutting production. Consolidation is the only way to save this industry. Otherwise, before the end of the year, we are going to see cif China prices at $2.00 flat," a market source told Metal Bulletin.

Shutdowns offered some support to manganese flake prices in May and June, but ultimately this was not enough to keep prices up as larger stocks continued to weigh on the market.

The downward trend is evident in all the minor metals, even those that are predominantly contract-based and less volatile, such as rhenium and silicon.

Going into the final quarter, market participants are mixed in their short-term outlook for the metals, with some predicting a return to pre-summer levels, while others forecasting continued downtrends

WEEK IN REVIEW: LME week finds metal markets at historic lowsMetal-Pages 09/10/2015

London Metal Exchange (LME) week this year finds the global market in the midst of an aggressive downturn rooted in China's transition to lower growth, with prices at multi-year lows and below the cost of production for many producers.

Switzerland-based mining and trading company Glencore, the standard bearer of the China-driven commodities boom of recent years, is engaged in a deep round of cost cutting and was recently forced to defend the resilience of its financial position as its stock price plunged in response to falling commodity prices. The company's initial public offering in 2011, is perhaps the enduring symbol of a peaking commodities boom.

The summer has brought a string of events and data releases that have compounded the pressure on base metals prices, ranging from the Greek financial crisis to a crash in Chinese equities and weakening data from China. Over half of nickel producers are unprofitable at current prices. Tin prices have fallen so heavily that both Indonesian producers and the government introduced a series of measures to stem the declines, and in zinc and lead Glencore decided to cut a third of its zinc output because, in its own words, its reserves underground are being devalued.

And yet some market participants say the bottom of the cycle may be close. For some metals, nickel in particular, prices are so low that there is only a limited scope for further declines before production cuts lend support. And while Chinese data continues to imply a slowdown in economic growth, outright Chinese consumption of all metals remains vast and will continue to rise as the economy enters its managed transition to slower but still robust growth.

LME week could also provide some clarity on the exchange's plans for its ambitious warehousing reform initiated in late 2013. During the summer the LME put forward two proposals to the industry for consultation — to increase the minimum load-out rate for metal stored in LME-approved warehouses and to introduce a cap on the rent charged for metal in a queue. The results were collected in August and the LME has not come back to the market


with its final conclusion. Judging from previous years, the LME may announce its findings at its annual seminar on 12 October.

The US spot ferro-manganese market is expected to be vulnerable to losses in the coming weeks despite stabilising losses in October after slipping on weak demand in the past quarter. Suppliers reported doing deals, although buying activity has been sparse in general, with steelmakers content with their intake settled in longer term contracts. US steel production capacity utilisation, currently around 72pc, is expected to fall to around two-thirds in the next couple of months, according to industry sources. That is expected to have a dragging effect on spot bulk alloys prices. The US spot high carbon ferro-manganese market has drifted down steadily in 2015. It was at an average annual peak in second quarter 2014. Current spot prices are now around an average low last seen in January 2007.

European ferro-alloys producers are following demand down, with further price falls seen as a developing trend through the current quarter. A price below €700/t is seen below production costs, which may offer some support through the rest of the fourth quarter, although suppliers may get aggressive as import offers persist. European suppliers are expected to increase liquidating their stock levels through the final quarter of the year as they square their order books and book profits and generate cash flow ready for New Year business.

The US silico-manganese spot market has dropped in October due to cheaper offer prices against weak demand, which is seen as a developing trend through the rest of 2015. There was hope the tubular and pipe sector would not crash as much as it did. The recent settlement of almost 3,000t of alloy to steelmakers Nucor and Steel Dynamics has dragged down the spot market.

WEEK IN REVIEW: The butterfly that stampedMetal-Pages 02/10/2015 At the end of a turbulent week a quiet spell that comes in the eye of a storm descended on the market as China closed for holidays and shares of commodities major Glencore regained some of the lost ground on the London Stock Exchange.

Chinese manufacturing saw its biggest monthly contraction in September since March 2009, according to the keenly watched Caixin PMI survey. China’s manufacturing PMI dropped to 47.2 in September as weaker customer demand saw a steepest drop in new export orders March 2009, and in overall new orders in more than three years.

Decreased consumption had a knock-on effect of cutbacks in production schedules and reduced raw material purchasing, with the resulting drop in prices of both finished goods and raw materials.

A chill wind is also blowing through the steel industry as Europe's second largest blast furnace faces closure. Thai steelmaker SSI, which reopened the former Tata Steel Teesside plant in Redcar, UK in 2012 said it is being forced to stop production there with a loss of 1,700 jobs blaming "severe deterioration in steel prices”.

The news rounded off one of the weakest quarter for UK’s manufacturing sector in two years. The UK’s manufacturing PMI slipped to 51.5 in September, with a fall in price of both input commodities and finished goods, and below the average 52 achieved in the Eurozone – where growth also slowed from August.

Meanwhile, Glencore’s share price rallied back above 94 pence ($1.43) on Friday, from a low of 68.62 pence on Monday when it lost almost 30pc of its value in a day. The Swiss-based commodities house’s equity is still trading 82pc below its value at its London IPO in 2011.


Monday’s stock crash was initially attributed to a note published last Friday by analysts at Investec that warned that the continued fall in commodity spot prices would erode Glencore’s value and the highly-leveraged company faced the risk of using up all its earnings to repay its $30bn debt. But the independent research firm was not the sole butterfly that flapped its wings to cause the earthquake.

Warnings came amid depressed manufacturing data and investor exodus out of commodities in China – of which the current crisis on the Fanya Metal Exchange is a symptom. Glencore’s $2.5bn share issue also came under fire from its existing investors as the company’s executives only received pre-emptive rights that safeguarded their interest from dilution.

Glencore on Wednesday came out fighting, saying its business “remains operationally and financially robust - we have positive cash flow, good liquidity and absolutely no solvency issues”. The equity issue, that increased its share capital by 9.9pc was only one of a raft of measures announced by Glencore to reduce debt by up to $10.2bn, including copper and cobalt production cutbacks in Africa and sales of unprofitable agri assets.

“Glencore has no debt covenants and continues to retain strong lines of credit and secure access to funding thanks to long term relationships we have with the banks,” the company said. As well as seeking to pacify shareholders, Citi, which acted as one of the arrangers of the $2.5bn fund raising, recommended that if its shares continue to be undervalued, CEO Ivan Glasenberg should take the company private. Shares began to recover from that point, but the move prompted fresh questions. London has seen two copper producers Kazakhmys – in its prior form, and ENRC disappear from the exchange in the past year, albeit for different reasons. With the prominent exception of Glencore and Noble, trading firms do not abound on stock exchanges. London trader Wogen, having gone public in 2005 on the back of a commodities boom, delisted in 2009.

But swelled by its acquisition of Xstrata (and having taken on its debt) Glencore is no longer just a trader - it has positioned itself a major producer in copper, coal and iron ore, and the world’s largest in ferro-chrome and cobalt. It has gained the benefits, but also the costs and risks that come with being a producer – particularly of bulk commodities heavily dictated by the Chinese market.

The turbulence in metal equities this week however has had a fallout in the markets as spot trade in ferro-alloys has all but ground to a halt. Concerns about financial liquidity is also leading some buyers in minor metals to re-negotiate contracts with suppliers amid depressed demand throughout the downstream chain.

Glencore ‘financially robust’ and reducing spot risk – BarclaysMetal-Pages 02/10/2015

Barclays held a roundtable with Glencore management on Thursday October 1, which the bank said “helped to clear up many misconceptions and confusion” over commodity trading and its associated risks.

Glencore’s share price lost 30% of its value on Monday September 28, tumbling to an all-time low after analysts at Investec warned that the miner-trader’s earnings potential could be wiped out if commodity prices do not rebound.

"The market is telling us that Glencore is in financial distress. Our credit colleagues believe this is premature […] they do not think Glencore is at risk of imminent default," Barclays said in a note circulated following the roundtable.

The meeting with Carlos Perezagua (Glencore’s co-head of corporate finance and capital markets), and Paul Smith (head of strategy and communications), reiterated that the miner-trader has "no liquidity or solvency issues", and remains "operationally and financially robust", according to Barclays.


Glencore has in excess of $13 billion of liquidity in cash and undrawn facilities, and while metal prices provide a risk, "our credit colleagues believe the company can retain its credit rating", Barclays said.

"Most of the other commodity traders have a lower [investment-grade credit] rating than Glencore and they are still able to operate," the bank added.

Credit and counterparty risk in Glencore’s trading business is reduced by the use of letters of credit, which are guaranteed by banks.

Price risk is limited as Glencore immediately hedges commodities taken on its trading book, mostly on the LME.

However, Glencore cannot hedge about 3% of its trades, in markets such as vanadium, where no liquid futures market exists, and cannot hedge physical premiums. The company’s earnings fell 29% in the first half of the year; its aluminium business was hit by significantly lower premiums.

In its first-half results, Glencore cfo Steve Kalmin said a $5 billion reduction in working capital would cut marketing earnings before interest and taxes (ebit) by $100 million, due to a focus on less profitable trades. The miner-trader intends to continue to reduce its working capital in marketing, and has highlighted a further $2-3 billion reduction in capital allocation in its marketing business.

Last month Glencore announced a $10 billion capital preservation programme, put together on the basis of copper prices in the low $4,000s per tonne. $5 billion has already been delivered, and Barclays believes the programme is a "credible way" to reduce net debt to the low $20 billions by the end of 2016.

"The market is effectively ignoring this, in our view," Barclays said.

If the company continues to de-gear, tighten capital allocation and improve efficiencies, "we believe this should deliver a business capable of withstanding the worst of commodity downturns," Barclays added.

Shares in Glencore were trading at 91.5p at the time of writing, down 0.5% from the start of the day’s trading. Barclays’ target price for the stock is 186p.

Glencore denies solvency issuesMetal-Pages 30/09/2015

Switzerland-based mining and commodities trading firm Glencore today defended the viability of its business, at the end of a month in which its share price has almost halved.

Glencore said its business "remains operationally and financial robust" and said it has "absolutely no solvency issues."

The company's shares have been crushed this month because of fears about its exposure to falling commodity prices and its large debt pile. Earlier in September, Glencore proposed debt reduction measures with an aggregate value of up to $10.2bn, as well as raising an additional $2.5bn in equity capital, with the objective of cutting net debt to "the low $20bns" by the end of 2016, from around $30bn at the end of June.

But this did not pacify investors. The company's share price fell from 133.5p on 1 September to an all-time low of 68.62p on 28 September, and is down from around 297p at the start of the year. Today, shares in Glencore were trading higher in London, at around 87p.


Glencore has interests in a number of commodities, but it is its exposure to metals — and to faltering Chinese demand — that is causing most market concern.

The company is one of the world's biggest traders of cobalt and ferro-vanadium, as well as a major ferro-chrome producer and trader, and significant exporter of chrome ore to China. European spot markets for ferro alloys have stalled this week, partly on renewed uncertainty over developments at Glencore.Banks say there is no immediate impact to Glencore's ability to trade. Trade finance is short-term, and banks will typically extend lines of credit to a trading company using the assets traded — such as oil cargoes — as collateral. There are also alternative mechanisms for financing trade, such as arranging lines of credit directly with counterparties.

But Glencore's debt burden could mean companies would rather trade with other trading firms if presented with similar terms.

"Given the manner in which Glencore's share price has collapsed and the loss of confidence in the company, counterparties might start to question whether it is worth dealing with Glencore when they have other trading partners that they could deal with instead," Investec mining analyst Hunter Hillcoat said.

Glencore buys crude from Russian state-controlled Rosneft on a pre-financing basis, and is now the third-largest buyer of Rosneft's crude.

It has oil producing assets in Chad and Equatorial Guinea on which it took an impairment charge of $792mn in the first half.

Energy trading was one of the bright spots of the company's first half of 2015. Although coal trading was hard hit by oversupply, the energy trading segment doubled earnings before interest and tax to $479mn "supported by increased volatility and beneficial curve structures in some oil markets, versus the largely 'flat' markets that prevailed over the first half of 2014".

"We remain focused on running efficient, low cost and safe operations and are confident the medium and long-term fundamentals of the commodities we produce and market remain strong into the future," Glencore said.

STEEL NEWS back to index

US delays antidumping finding on steel importsMetal-Pages 15/10/2015

The Commerce Department has delayed determination of preliminary anti-dumping duties on imports of certain corrosion resistant steel products from five countries by 41 days to December 21 because of the complexity of the case.

The Commerce Department began the anti-dumping investigation into the products from India, Italy, China, South Korea and Taiwan on June 23. Preliminary determinations had originally been due no later than 10 November.

The department said today all the parties in the investigation are cooperating but that the case is "extraordinarily complicated" because of the number and complexity of the transactions and companies under security and the "novelty" of the issues.

The Commerce Department has also completed an administrative review of a countervailing duty order on circular welded carbon steel pipes and tubes imported from Turkey during the period of 2013.

The department made changes to the net subsidy rate determined for the Borusan Companies, the sole mandatory respondent in the case, of 0.91pc and set the same net


subsidy rate for Tosyali, Toscelik, Umran and Guven, which were not selected for review. It also rescinded its review of the Erbosan and Yucel companies because it determined they did not ship those goods to the US during 2013.

US steel production cuts point to continued sluggishness in alloy marketsMetal Bulletin Research 14/10/2015

North American bulk alloy markets continue to struggle as domestic steelmakers adjust production to cope with further finished steel product price declines. US Steel appears to be the first domestic steelmaker to address the latest pricing collapse, and is once again considering temporarily idling its Granite City works in Illinois. The plant has steelmaking capacity of 2.8m short tpy. US Steel initially planned to temporarily idle the works in March, but reversed that decision in May, presumably influenced by improving prices at that time, though that upward pricing momentum has clearly vanished in recent months. In addition, US Steel has already announced a reduction in its salaried staff. A labour lockout or strike at either US Steel or ArcelorMittal is still possible, but not very likely as negotiations are continuing with the United Steelworkers.

Average US steel mill capacity utilisation rates are sliding again in early October, dropping to just 71.3% over the past week. Meanwhile, US ferro-silicon supplies are ample, with plentiful material available from both domestic and overseas sources. While US crude steel output has fallen 7.1% year-on-year thus far in 2015, US imports of ferro-silicon remain on a par with last year’s levels at 140,259 tonnes in the first eight months of 2015, down just 1.7% year-on-year versus 142,707 tonnes in the same period last year. With steelmakers looking to hold down raw material prices as finished steel prices decline, it comes as little surprise that domestic ferro-silicon prices have slipped most recently. Similarly, US silico-manganese prices are also struggling, but holding for now.

MBR outlook The outlook for both bulk and specialty alloys remains dismal, with increasingly negative outlooks for the steel, and in turn alloy markets, for the remainder of 2015. The slump in Chinese steel demand and slower economic growth in the nation is dampening steel and alloy markets around the world. The strong US dollar is hindering the US steel and alloy markets from benefiting from relatively stronger growth within the domestic industry as imports of both finished steel and raw materials continue to flow to the USA. The energy market collapse has also had severe negative implications for both steel and alloy markets, and we do not foresee any reversal in energy markets in the near-to-medium term. We expect ferro-alloy prices to persist on a stable to downward trend in the coming weeks, with the only potential boost for prices coming from seasonally lower alloy production in the final weeks of the year due to rising northern hemisphere winter energy costs.

Worldsteel cuts demand forecasts on China weaknessMetal-Pages 12/10/2015

Steel trade association Worldsteel substantially lowered its forecast for apparent steel consumption in China today, and said it marked the end of the "supercycle" or "a major growth cycle based on the rapid economic development of China".

The slowing pace of global steel demand means overall global demand will contract by 1.7pc this year, largely driven by a 3.5pc contraction in demand in China, Worldsteel — which represents producers in 65 countries — said in its biannual short-range outlook.

World steel demand will grow by 0.7pc to 1.52bn t in 2016, the association said.

The forecasts represent a sharp downgrade from April's short-range outlook, with the forecast for global demand in 2015 downgraded by 2.2 percentage points while China's demand has been lowered by 3.0 percentage points.


The 2016 forecast has been lowered by 0.7 percentage points while China's steel demand forecast has been reduced by 1.5 percentage points. Worldsteel notes that the current forecast of a 2pc contraction in China in 2016 is based on the likelihood of Chinese economic stabilisation, but said that emerging economies' vulnerability was a downside risk.

China's slowdown is coinciding with "low investment, financial market turbulence and geopolitical conflicts in many developing regions", Worldsteel economics committee chairman Hans Jurgen Kerkhoff said. Low growth will last until other developing regions of sufficient size and strength can produce another major growth cycle, he said.

US steel exports edge up in AugustMetal-Pages 08/10/2015

US steel exports rose by 1.7pc to 826,470 net tons (749,335 metric tonnes) in August from July, as shipments to Canada and Mexico were modestly higher while sales to the European Union spiked.

US exports fell by 21.2pc in August from the same month a year earlier, the American Institute for International Steel said today.

Exports to Canada gained 1.5pc to 406,475nt in August from the prior month, but fell by nearly 30pc from a year earlier. Exports to Mexico rose by 1.8pc to 316,938nt in August from July, but fell by 12.2pc from 2014. Exports to the EU surged by 32pc to 32,888nt on the month and were 6.9pc higher than a year earlier.

Year to date, exports fell by 14.5pc to 6.94mn nt. Shipments to Canada lost 22.2pc to 3.38mn nt, shipments to Mexico fell by 4.3pc to 2.66mn nt, and exports to the EU rose by 8.6pc to 249,387nt.

The IMF this week downgraded its forecast for economic growth in Canada to 1pc this year and 1.7pc next year, a sign Canada, which buys about half of all US exported steel, is unlikely to increase purchases from the US.

US construction output jumps almost 14pc year on yearMetal-Pages 08/10/2015 US construction production was up 13.7pc in the 12 months to the end of August 2015, amounting to $1.09tn, from the 12 months before, according to the latest data from the US Census Bureau. That is the highest level of US construction output in seven years. August saw residential construction for the rolling 12-month period jump 16.4pc year on year to $390bn. The value of commercial construction was up 12.3pc to $696bn. There are many ferro-alloys and minor metals that are used in the residential and commercial construction sectors, as well as the appliances that fill them. Silico-manganese is used in long steel products such as rebar and wire mesh for use in construction. It is a source of both silicon and manganese, and sometimes as an alloying agent in the production of iron castings. Other ferro-alloys used in construction are ferro-molybdenum, ferro-vanadium and ferro-silicon, as well as minor metals such as antimony, tantalum, copper and aluminium. Most of the growth in general in the US construction sector in the past 12 months has been in the private sector. Privately funded construction was up 16.5pc at the end of August 2015, year on year, at $788bn.


That amounts to 72.5pc of US construction output. Publicly funded construction was up only 7pc in the same comparison to $298bn.

China, Japan lead drop in US steel importsMetal-Pages 08/10/2015

Applications for US steel import permits fell by 8pc in September from the prior month and applications for finished steel import permits fell by 10pc from August, led by falling shipments from China, Turkey and Japan.

Applications for import permits totaled 2.89mn net tons in September, compared with 3.13mn nt permitted in August and a 6pc decrease from the August final imports total of 3.06mn nt, the American Iron and Steel Institute said today, based on the Commerce Department's steel import and monitoring analysis.

Import permit applications for finished steel in September totaled 2.23mn nt, down by 10pc from the final import totals of 2.48mn nt.

For the first nine months of the year, total imports were down by 5pc at 30.96mn nt and finished steel imports were up by 3pc at 25.18mn nt. Imports of finished steel accounted for 25pc of the US market in September and 30pc of the market year to date.

South Korea accounted for the largest share of finished steel import applications in September, up 1pc to 306,000nt from August's final figures, and imports from Germany were up by 80pc at 153,000nt.

China's finished steel import applications were down by 19pc at 127,000nt, Turkey was off by 13pc at 148,000nt and Japan's import applications were down by 13pc at 188,000nt.

For the first nine months of the year, imports of finished steel from China were down by 11pc at 2.09mn nt, South Korea was down by 1pc at 3.98mn nt and Turkey's imports were up by 48pc at 2.19mn nt.

US September auto sales make gainsMetal-Pages 07/10/2015

US automobile sales rose in September at their fastest pace in two years amid surging demand for light trucks.

Total automobile sales in September rose by 15.8pc from a year earlier to 1.44mn, according to automotive consultant Autodata. The increase in demand far outpaced the 5pc rise in sales in the first nine months of the year.

The surge in sales was led by a 23.7pc rise in light truck sales, which accounted for 57pc of total automobile sales. This was up from a 50pc share in 2014. Car sales rose at a slower 6.7pc pace in September, although this was also faster than the 2pc contraction in sales in the first nine months of the year.

Sales on a seasonally adjusted basis rose in September to a 10-year high of 18.17mn.

Brazil auto industry crisis deepensMetal-Pages 07/10/2015

Brazilian auto industry output was down 42.1pc in September against the same month a year earlier to 174,200 vehicles from 300,800 vehicles.

While production was down 20.2pc in the first nine months of the year at 1.90mn vehicles from 2.38mn in the opening three quarters of 2014 the development further douses any


hopes that steelmakers, foundry producers and ferro-alloys suppliers might have held of a pick-up.

Brazil's auto industry is a vital source of orders for steelmakers and foundry producers. In turn ferro-alloys producers rely heavily on these sectors for business.

Executives in both industries have been crossing fingers for small signs of a recovery before the end of the year.

Brazil's foundries sector consumes ferro-alloys such as ferro-manganese, ferro-silicon and ferro-molybdenum, as well as magnesium.

US raw steel output falls in latest weekMetal-Pages 06/10/2015

US raw steel production fell by 0.5pc to 1.73mn net tons (1.57mn metric tonnes) in the week ended 3 October from the prior week's 1.74mn nt, the American Iron and Steel Institute said today.

Capacity utilisation was 72.2pc in the latest week, down from 72.6pc in the prior week.

Steel production in the most recent week fell by 7.3pc from the same period last year, when output was 1.86mn nt and capacity utilisation was 77.4pc, AISI said.

Year-to-date production through 3 October was 67.82mn nt, at a capacity utilisation rate of 72.5pc. That is down by 8pc from 73.23mn nt during the same period in 2014, when the utilisation rate was 78pc.

Production in the northeast totalled 195,000nt in the latest week, 659,000nt in the Great Lakes, 221mn nt in the Midwest, 563,000nt in the south and 89,000nt in the west.

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Manganese market extends losses in ChinaMetal-Pages 15/10/2015

The Chinese manganese market has extended losses with flake prices dipping by another RMB200/t amid quiet buying from stainless steelmakers in an oversupplied market.

Although smaller producers without in-house mines stopped production in the middle of April, the bigger producers have been operating at half of their utilised production capacity, and some at nearly full capacity, while stockpiling much of that output due to muted domestic and export demand.

On the spot market, prices have continued to drop on a daily basis amid thin buying. Producers are pessimistic about the outlook for the manganese market as spot buying has been limited after the national holiday, and decreased stainless steel prices also weighed on the gloomy manganese market.

Metal-Pages last assessed prices for manganese flake 99.7pc on 15 October at RMB200/t lower than on 13 October.


Export demand is also weak as production has been cut by southern and eastern European steelmakers, and Chinese producers have also cut selling prices for flakes by $60/t compared with last week.

Manganese flake prices fall on lack of spot buyingMetal-Pages 13/10/2015

Chinese manganese prices have fallen this week on a lack of buying amid depressed demand from stainless steelmakers.

Due to low manganese prices, small producers without in-house mines have no intention of resuming production after they halted output in the middle of April, and bigger producers have been operating at around half their utilised production capacity.

A big stainless steelmaker has not purchased manganese lumps for nearly six months as it has cut use of manganese in production of stainless steel, while the company used to purchase 320t of 97pc lump per month in 2014.

Metal-Pages last assessed prices for manganese flake 99.7pc on 13 October RMB200/t lower than last week.

In line with falling domestic prices, export prices have dipped this week. POSCO, one of the largest manganese consumers in the world, has not begun its monthly purchase for October requirements.

Europe Mn flake market off $100/t amid weak fundamentalsMetal-Pages 13/10/2015

The European manganese spot flake market has fallen $100/t in the past week and is vulnerable to further losses in the short term amid weak fundamentals. In China, the key supplier to Europe, exporters are offering material about $50, or almost 2pc in the past week. European dealers reckon that the 2006 low may be revisited again before the end of 2016 due to reduced demand from ferro-alloys producers that supply to the steel sector. The European steel sector is also very weak, with too much production capacity, oversupply and having production cuts as a result. Consumer demand in construction and the energy sectors, where manganese-contained steel is used in tubes and pipes, has been weakening in 2015, with flat steels lagging but also getting weaker. There have been production cuts in southern and Eastern European steelmakers, Turkish steelmakers, as well as news this week that SSI in the UK has failed to find a buyer and will shut permanently its 2.5mn t/yr blast steelmaking furnace after going into liquidation a couple of weeks ago. Dealers reported sales of 10 and 20t lots in October. Material is on the water waiting to be sold against very weak demand in Europe where there are plentiful stock levels, according to industry sources. Suppliers are struggling to make money at current prices, but will be trying to offload as much material as they can before year-end holidays. It costs more money to hold material in warehouses in Europe than to sell it at a loss, and dealers typically clear their order books as much as possible around the end of the calendar year to book profits and generate cashflow for the next year's business.


In China there have been production cuts of about a third on average, but producers there are running due to economic and political considerations as they are often the biggest employer in the area. But Chinese domestic demand is also weak, so manganese flake suppliers are exporting as much as they can, even leaving material on the water to ship as soon as an order arrives. Manganese lump and briquettes are in tighter supply and selling at a premium to flake prices. The lump and briquettes prices are nominal as virtually all business is being done between a few suppliers and consumers, with supplies much tighter compared with manganese flakes.

Manganese flake market slow in China, prices unchangedMetal-Pages 09/10/2015

Chinese manganese prices have been unchanged in the past few days. Producers are pessimistic about market outlook in view of depressed demand from stainless steel mills and oversupply.

Key stainless steelmakers are likely to restart their monthly purchases next week, which will provide a clearer picture of the market.

Metal-Pages last assessed prices for manganese flake 99.7pc at a level similar to last week.

Due to lower manganese prices, small producers without in-house mines have no intention of resuming production, which they halted in the middle of April, and bigger producers have been operating at half their utilised production capacity.

The export market has been slow with flake prices holding. POSCO, one of the largest manganese consumers in the world, will begin its tender process next week.

Europe Mn market drifts sideways, awaits China returnMetal-Pages 05/10/2015

The European manganese spot flake market is in a holding pattern for the time being, extending a steady trend established late last month and awaiting the return of dealers in China after a week-long national holiday. But pressure is expected to be on the downside when dealers in China, the key supplier to Europe, return after their holiday on 8 October.

The Chinese manganese market has been under pressure in recent weeks due to weaker-than-expected tender purchases from stainless steelmakers after the seasonal slowdown. Most manganese producers in China are running at only 20-30pc of their total production capacity utilisation due to weakening demand. And prices for selenium dioxide, a raw material used in manganese flake production, have been dropping lately as a result. Chinese export offers are expected to weaken in the coming weeks, although with the market seen close to production costs and at such limited output levels, price losses should be low initially. The European market is at a level last seen in December 2006. The direction of the Chinese export price usually moves in tandem with the European price and is also at a low last seen in December 2006. There are readily available stock levels of manganese flake in European warehouses, with some dealers suggesting there is enough material to meet demand from the domestic steel sector until January 2016.


The European steel sector has been mixed in 2015, with production utilisation levels below 50pc in southern countries and up around 80pc or above in northern European countries. But steel prices are also at multi-year lows and seen held around current levels in the coming months due to a fragile, uneven economic recovery in Europe. End-user demand in construction and the energy sectors, where manganese-contained steel is used in tubes and pipes, is muted, although flat steels consumption has been a little stronger. Manganese lump and briquettes are in tighter supply and selling at a premium to flake prices. The lump and briquettes prices are nominal as virtually all business is being done between a few suppliers and consumers, with supplies much tighter compared with manganese flakes.

EMD back to index

Volkswagen shift to electric cars could boost REEsMetal-Pages 14/10/2015

German carmaker Volkswagen's plans to step up its development of hybrid and electric vehicles in the wake of the scandal over the company's cheating on vehicle emissions tests could drive growth in the rare earths market.

Volkswagen plans to cut spending on its key passenger car division by €1bn/yr ($1.14bn/yr) through to 2019 as part of its focus on developing hybrid and electric vehicles, it said yesterday.

Hybrid and electric vehicles are expected to drive growth in the rare earths market, particularly in the manufacturing of rare earth magnets used in motors, and battery metals such as lithium, cobalt, molybdenum, nickel, cadmium and manganese.

Rare earth magnet demand is expected to grow by as much as 8-12pc/yr until 2020, acting as a key driver of global rare earth consumption, according to professor Dudley Kingsnorth of Australia's Curtin University.

Toyota Yaris Hybrid production marks milestone in FranceMetal-Pages 09/10/2015

The number of Toyota Yaris Hybrid cars produced at the Japanese automaker’s plant in Valenciennes, France topped 200,000 to date this week.

Toyota says the plan now churns out more than 300 Yaris Hybrids a day. The hybrid model accounts for 40pc of total Yaris production, up from initially 25pc in April 2012 when the plant in northern France started building the hybrid version.

A Yaris Hybrid is equipped with a 1.5l petrol engine and an electric motor, and as in all other Toyota full hybrid models, the battery does not need to be plugged in for recharging as it is recharged when braking and accelerating.

Yaris Hybrid uses nickel metal hydride (NiMH) batteries, rather than lithium-ion batteries as used in Toyota’s Prius+ and Prius Plug in models. French recycler Société Nouvelle d’Affinage des Métaux (SNAM) collects and recycles these batteries at the end of their life.

The Yaris is Toyota’s best selling model across Europe, selling 181,105 cars last year and accounting for one in five Toyota’s sold in the region. A third of these vehicles, 58,530 were Yaris Hybrids.


France is the largest market, absorbing 20pc of Yaris Hybrid production, compared with 16pc each going into Italy and the UK. The 200,000th Yaris Hybrid produced in Valenciennes on 5 October will be also delivered to a French customer, Toyota said.

The controversy over emissions testing that enveloped German manufacturer VW last month and is seeing new inspections extended to other diesel cars in Europe is expected to benefit demand for hybrid cars, particularly the best selling Yaris.

In the first half of 2015, 118,195 hybrid cars in total were sold across the European region, according to automotive manufacturers association ACEA accounting for 1.59pc of all passenger car sales, up from 1.47pc. While the market penetration is growing from a low level, this is expected to accelerate in response to demand for fuel economy and reduced emissions.


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