Manganese Matters n° 6 (Issued March 30, 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 MATTERSMarch 30, 2015 - Issue n° 6

Article Index 3

IMnI UPCOMING MEETINGS

Joint Meeting Statistics Committee & China Statistics Sub-CommitteeThrusday, April 29:00 to 11:00Singapore

M&C Committee MeetingThursday, April 211:10 to 13:10Singapore

International Manganese Institute17 rue Duphot75001 ParisFranceTel : +33 (0) 1 45 63 06 34Fax : +33 (0) 1 42 89 42 92E-mail : info@manganese.orgWeb site: www.manganese.org

8th Annual IMnI China Banquet to Be Held in Singapore

IMnI will be hosting its 8th China Banquet in Singapore on Wednesday, April 1st, during the Metal Bulletin Ferroalloy Conference. This event, which has now become a tradition, offers IMnI‘s China members and potential members the opportunity to meet with non-Chinese producers in an informal setting. As in the past, the Asia Metal Bulletin Ferroalloy Conference provides us with an excellent occasion for hosting the banquet, as we know many Chinese players be in attendance.

The banquet will be preceded by a short information program designed to encourage the participants to attend IMnI’s Annual conference in Shanghai, in June, which will largely focus on China’s Mn industry.

If you are interested in having your company participate, please contact us at: events@manganese.org

IMnI 2013 Annual Review Just Released

IMnI's latest Annual Review highlighting our activities in 2014 is now available.

Click on the image to view.

IMnI 2015 Annual Conference & EPD Conference

Back-to-Back in China in JuneSave the Dates

IMnI is hosting its two flagship events – the Annual Conference and the EPD Conference – back-to-back this coming June in China, to encourage members to attend both.

The 41st ANNUAL CONFERENCE will take place Tuesday, June 16 -- Thursday, June 18 in Shanghai at The Portman Ritz-Carlton. This year’s theme: China at the Crossroads: Into the Mouth of the Dragon. A line-up of world-class experts and speakers will be presenting, including James Kynge, Financial Times Emerging Markets Editor and author of "China Shakes the World: The Rise of a Hungry Nation".

Manganese Matters n° 6 (Issued March 30, 2015) 2The 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.

The 12th EPD CONFERENCE is scheduled for Friday, June 12 at the Four Points Hotel, Shenzhou Peninsula, Hainan Province. This is the sole annual meeting of producers of Mn Metal and Mn Dioxide produced electrolytically and provides an excellent forum for Mn ore producers to network with them and learn more about their industry.

To bridge the two conferences, IMnI will be proposing Technical Tours to China's Top Mn Smelters, Saturday, June 12 – Monday, June 14.

More information can be found here

Infacon XIV 2015June 1-3, 2015 - Kiev

INFACON international ferroalloys congresses held once every 2-3 years for the past 40 years (since 1974) are the most authoritative forums of the world ferroalloy industry. Participation in INFAСONs offers specialists the opportunity to learn about the advances in equipment and technologies for the ferroalloy conversion, as well as to identify industry development prospects as a whole, or those of specific

Manganese Matters n° 6 (Issued March 30, 2015) 3The 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.

companies and businesses. It is about exchange of the most complete and updated technical and market-related information, including news about the recent developments of main and auxiliary equipment for ferroalloy production, energy efficiency, slag processing, gas purification, etc.

INFACON 14 is being held in Kiev, the capital city of Ukraine, June 1-3, 2015, hosted by IMnI member the Ukrainian Ferroalloy Industry Association (UkrFA). IMnI has been strongly encouraging its members to attend in force. The organizers assure us the Kiev remains a safe destination and we have been tracking the situation there ourselves. However, in light of recent events, we advise members to seek advice from their national authorities before travelling.

Special Discount for Metal Bulletin Conference in IstanbulIMnl has negotiated a 15% discount* for IMnI members to the 31st International Ferro-Alloys Conference which will be held in Istanbul from November 8 to 10. Program and information can be retrieved here.

To take advantage of the special discount, please register on Metal Bulletin’s website here using this code: IFA15IMnI  or send an email to marketing@metalbulletin.com

*Applied to first two delegates from named company only. Not applicable to existing discounted registrations.

http://www.manganese.org/events/imni-event/2015-imni-41st-annual-conference

16th Asian Ferro-Alloys Conference31 March – 2 April 2015Shangri-La Hotel, Singapore

International Ferro Alloys Trade Meet17-18 April 2015The Lalit, New Delhi

INFACON XIV 2015June 01-03, 2015 – Kiev, Ukraine

IMnI EPD ConferenceJune 12, 2015Four Points Hotel, Shenzhou Peninsula, Hainan Province

IMnI 41 st Annual Conference June 16-18, 2015The Portman Ritz-Carlton Hotel – Shanghai

31st International Ferro-Alloys Conference8-10 November 2015Hilton Bomonti Hotel, Istanbul

ARTICLE INDEX

ASIA (OTHER) Samalaju Industries increases stake in Sarawak smelting project ..................................... 26/03/15 Progress of Assmang's Sakura Ferroalloys Project announced – TEX ............................. 25/03/15 Gulf appoints engineers as managers of its Mn project

...........................................................................................................................................23/03/2015

CHINA China ferro-alloys review – ferro-silicon, manganese prices continue falling ..................... 27/03/15 China’s Shagang cuts SiMn intake in April, ups FeSi ........................................................ 26/03/15 China Shandong Intl starts ferro-alloys tender for April ..................................................... 25/03/15 Chinese manganese ore prices fall on lower BHP offers, ample stocks ............................ 23/03/15 China SiMn to fall further in April amid ample stocks, low demand .................................... 23/03/15 China’s top ten manganese ore importers in January ........................................................ 23/03/15 China to monitor energy consumption of ferro-alloys in 2015, no uptick in sigh ................ 23/03/15 China ferro-alloys review – FeCr prices rise on higher tender prices ................................. 20/03/15 Ningxia Sincerity Manganese restarts FeMn furnace ........................................................ 19/03/15 Manganese ore prices in China slip down as alloys suffer ................................................ 19/03/15

INDIA Ford Motor opens its $1bn manufacturing facility in Gujarat .............................................. 26/03/15 Investors positive on Tata Steel as new mining bill will pave way for increase in capacity 24/03/15 India Market Report - demand for ferro-alloys remains weak ............................................ 20/03/15 Fire at Andhra Ferro’s plant damages furnace .................................................................. 20/03/15 Chhattisgarh Government cuts central sales tax on ferro alloys by 50pc .......................... 20/03/15

EUROPE Europe SiMn market set to end month unchanged ............................................................ 27/03/15 Europe FeMn looks to Q2 pick-up in buying activity .......................................................... 27/03/15 New steel AD duties set to benefit EU ferro-alloys demand .............................................. 26/03/15

CIS Depreciation shelters Ukraine ferro-alloy producers from higher power prices .................. 25/03/15 Kosaya Gora Iron Works restarts operations at third furnace ............................................ 19/03/15 Ukraine's SiMn production up 5.5pc, FeSi output halved in Jan-Feb ................................. 18/03/15

OCEANIA Eclipse Metals has early cash flow potential at Mary Valley .............................................. 27/03/15

AFRICA & MIDDLE EAST Burkina Faso orders halt to production at manganese mine .............................................. 26/03/15 S Africa power utility Eskom hit by triple whammy of bad news ........................................ 25/03/15 Cash-strapped Eskom seeks further 25.3% hike in power prices ...................................... 25/03/15 Pallinghurst shares rise on triple performance in troubled times ....................................... 24/03/15 Pallinghurst almost trebles annual profit ............................................................................ 23/03/15 S Africa Mn ore output projected to grow to 16mn t by 2019 ............................................. 20/03/15 S Africa metal and alloy producers face sharp electricity, fuel price rises .......................... 19/03/15

AMERICAS Some US bulk alloy prices fall; ferro-chrome gains ........................................................... 22/03/15 SiMn market vulnerable to price losses on weak steel ...................................................... 19/03/15

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

GENERAL INFORMATION Slower growth in global steel output dampens ferro-alloy markets: Latest Analysis .......... 26/03/15 Poor supply discipline and precarious demand growth shake the market ......................... 26/03/15 Mn ore supplies to drag on prices in medium term – report ............................................... 25/03/15 BHP Billiton advises shareholder approval for demerger ................................................... 24/03/15 INTERVIEW: Longer term upside for commodity prices as development pipeline slows ... 23/03/15 WEEK IN REVIEW: Dollar rise against euro drives metal prices ....................................... 20/03/15 What Does South32 Mean for the Nickel and Manganese Markets? ................................. 19/03/15 South32 could be interesting ............................................................................................. 19/03/15 Manganese ore prices collapse in response to surplus supply .......................................... 19/03/15

STEEL NEWS US steel sector is under siege, executives tell Congress .................................................. 26/03/15 Q1 performance has been poor, though an uptick is expected .......................................... 26/03/15 Global crude steel output growth a mere 0.6% in February: Crude Steel Highlights ......... 26/03/15 EU anti-dumping duty hits China, Taiwan stainless ........................................................... 25/03/15 ArcelorMittal sees no more steel cuts in Europe this year ................................................. 23/03/15 Global steel output rises 0.6pc in February ....................................................................... 20/03/15 UK budget promises boost for car sector, SMEs, northern industry .................................. 19/03/15 Brazil steel production sees uptick in February ................................................................. 19/03/15 US sets preliminary duties on Turkish steel imports .......................................................... 18/03/15 Salzgitter subsidiary wins 10,000t offshore wind project steel order .................................. 18/03/15

OHES & SCIENCE

OTHER

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

EMM Manganese prices hit 5-year low in China ......................................................................... 26/03/15 Chinese selenium dioxide market eases on weak Mn industry .......................................... 26/03/15 European Mn flake market stems losses, but vulnerable ................................................... 25/03/15 Anticipation of price fall of manganese metal in China grows – TEX ................................. 25/03/15 Manganese prices in China edge down amid thin business .............................................. 20/03/15 China manganese briquette exports up 28.94pc in January .............................................. 20/03/15 European Mn flake market close to less than $2,000/t ...................................................... 20/03/15

EMD

THE MANGANESE INDUSTRY

ASIA (OTHER) back to index

Samalaju Industries increases stake in Sarawak smelting projectThe Star 26/03/2015 Samalaju Industries Sdn Bhd has purchased an additional 5.0 per cent stake in the ferrosilicon and manganese alloys smelting project in Samalaju Industrial Park (SIP) from OM Materials (S) Pte Ltd for US$18.45 million (US$1=RM3.67).

Upon its successful completion, Samalaju Industries' stake in the project would be raised to 25 per cent while OM Materials would hold the remaining 75%.

Samalaju Industries is wholly-owned by Cahya Mata Sarawak Bhd while OM Materials is wholly-owned by OM Holdings Ltd.

In a filing to Bursa Malaysia, Cahya Mata Sarawak said the transfer was anticipated to be completed by end-March.

Progress of Assmang's Sakura Ferroalloys Project announced - TEXTEX Report 25/03/2015 Assmang Limited, South Africa has been proceeding with Sakura Ferroalloys Project, a manganese containing ferroalloy production business in Sarawaku, Malaysia and this time announced its progress situation.

All the main construction materials have already been on site, and the construction of the steel furnace shells are going on, and the contractor have continued construction work for completion.

The Company has a goal for production of 170,000 tonnes in a total of ferro manganese and silico manganese in the fiscal year 2017 (July 2016 to June 2017) and currently the construction work is going on as scheduled.

Besides, this time's announcement showsMain logistics contracts are completed;Contracts to unload raw materials and ship products at the port of Bintulu are under negotiation;The blending ratio of raw materials to be put into the furnace is fixed andNegotiations with raw material suppliers are going on at the moment.

Gulf appoints engineers as managers of its Mn projectMetal-Pages 23/03/2015 New outputASX-listed Gulf Minerals Corporation has appointed Como Engineers as project managers for the construction of its Kupang smelter project in West Timor, it said on its website. Gulf Minerals is planning to construct eight furnaces within four years to make 78pc ferro-manganese from Indonesian high grade manganese ore. The company is looking to develop manganese projects in Indonesia and Turkey. Major site work is due to start on 1 July this year, with the first high carbon ferro-manganese production to be tapped by 1 July next year. Gulf Minerals is developing its smelter facilities

in the West Timor capital Kupang to take advantage of the low cost of ore, labour and power, which represent the majority of operating costs. The new facilities will have eight furnaces, each of which is expected to cost $5.6mn, with an annual production capacity of 20,000t of 78pc ferro-manganese from third party ore. The company is planning to build the first two furnaces this year, with a start-up date of January 2016. Another two furnaces will be built each year in 2017, 2018 and 2019. Gulf will be exporting 50pc-plus manganese ore to provide early cash flow, and from this year annual exports will start at 60,000t and increase annual at 30,000t to 180,000t in 2018. Ore will be sourced from West and East Timor.

CHINA back to index

China ferro-alloys review – ferro-silicon, manganese prices continue fallingMetal-Pages 27/03/2015

Chinese ferro-silicon and manganese flake prices fell this week on account of more aggressive offers against thin business, other markets were stable supported by high production costs.

Ferro-silicon producers lowered prices further to promote sales, but only a few deals were concluded on the spot market in view of weak consumer demand. A number of steelmakers have started a new round of monthly purchases this week, while tender prices are expected to drop further in April in response to a sluggish steel market.

The legal export market is quiet, hit by illegal business, with 25pc export duty evaded on the black market.

Spot prices for imported manganese ore have fallen again in response to price cuts by BHP Billiton for its shipments to China in April.

Most producers in southern China have halted production because of higher electricity prices in the dry season and lower product prices, and a number of producers in northern China have cut or halted production since March in response to the sluggish steel market. As a result, demand for ore has been reduced further, leading to lower prices. Stocks were about 3.6mn t in the middle of March.

In addition, manganese alloys producers have little interest in replenishing stocks in view of low prices on the spot market, and most of them are buying raw material in line with production requirements.

The silico-manganese market remains sluggish in line with slow consumer demand, and prices are lingering at low levels on thin business in the spot market.

Market players are downbeat about market outlook in the coming month on the back of weak consumer demand and ample stocks.

Steelmakers have pushed down manganese alloys prices month by month since the start of 2015 in response to the steel market. Ample silico-manganese stocks have also helped to depress prices.

In addition, BHP Billiton continued to lower its offer prices for delivery in April, which will encourage steelmakers to lower prices further in the coming month.

A few producers have cut or halted production in Ulanqab region, Inner Mongolia as the International Olympic Committee (IOC) has sent an evaluation delegation to China to review Beijing and Zhangjiakou's joint bid for the 2022 Winter Olympic Games.

But the closure is expected to have little influence on the market as silico-manganese stocks are sufficient.

Manganese flake prices have dropped amid thin business in the oversupplied market.

POSCO, the largest manganese consumer in South Korea, has issued its tender price for manganese flake with delivery in April. Their purchasing volume is about 3,200t.

As new rounds of monthly purchases will begin, stainless steelmakers are likely to continue to press down tender prices in the face of declining stainless steel prices. But a large markdown is not on the horizon as current prices are hitting their lowest level since October 2008.

The export market is seeing tough times with more traders exporting material via illegal routes, with a source reporting that some traders have exported flakes to Europe via illegal routes, while key producers are holding their offers, with no deals concluded yet.

Exporters are required to pay a 17pc domestic value added tax before shipping material overseas. Prices are at least $50 lower than legal business if some percentage of the VAT is evaded.

China’s Shagang cuts SiMn intake in April, ups FeSiMetal-Pages 26/03/2015

Shagang Group, the largest private steelmaker in China, has started a new round of monthly procurements for April. The company is planning to cut its purchase volume for silico-manganese but increase the volume of ferro-silicon according to its needs.

Shagang Group is set to buy 12,000t of silico-manganese, a decline of 3,000t compared with the previous month. The steelmaker plans to buy 4,000t of ferro-silicon, an increase of 500t compared with March. In addition, the steelmaker intends to buy 800t of medium carbon ferro-manganese and 600t of low carbon ferro-manganese.

Spot prices for ferro-silicon 72pc grade were down on 26 March in response to weak consumer demand.

Steelmakers’ tender prices for manganese alloys are seen staying at a multi-month low or edge down in the coming month in line with a sluggish steel market.

China Shandong Intl starts ferro-alloys tender for AprilMetal-Pages 25/03/2015

China's Shandong International Trading Group, a subsidiary of Shandong Iron and Steel Group, has started a new round of monthly ferro-alloys procurements for delivery in April.

The company is planning to buy 10,765t of ferro-alloys for its parent company. The material includes ferro-silicon, silico-manganese, high carbon ferro-manganese, medium carbon ferro-manganese and 12 other products. The public tender will be closed on 25 March.

A number of steelmakers will start their monthly procurements in the coming week following the tender by Shandong Iron and Steel Group, while manganese alloys tender prices are expected to fall further in response to a sluggish steel market and lower ore prices.

Chinese manganese ore prices fall on lower BHP offers, ample stocksMetal-Pages 23/03/2015

China’s spot prices for imported manganese ore have fallen again this week in response to price cuts by BHP Billiton for its shipments to China in April.

Most producers in southern China have halted production because of higher electricity prices in the dry season and lower product prices, and a number of producers in northern China have cut or halted production since March in response to a sluggish steel market. As a result, demand for ore has been reduced further, leading to lower prices. Stocks were about 3.6mn t in the middle of March.

In addition, manganese alloys producers have little interest in replenishing stocks in view of low prices on the spot market, and most of them are buying ore in line with production requirements.

China SiMn to fall further in April amid ample stocks, low demandMetal-Pages 23/03/2015

The Chinese silico-manganese market remains sluggish in line with slow consumer demand, and prices are lingering at low levels on thin business in the spot market.

Market players are downbeat about market outlook in the coming month on the back of weak consumer demand and ample stocks.

Steelmakers have pushed down manganese alloys prices month by month since the start of 2015 in response to a sluggish steel market. Ample silico-manganese stocks have also helped to depress prices. In addition, BHP Billiton continued to lower its offer prices for delivery in April, which will encourage steelmakers to lower prices further in the coming month.

China’s top ten manganese ore importers in JanuaryMetal-Pages 23/03/2015

China imported 1,506,265t of manganese ore and concentrate in January 2015, a decline of 31,311t or 2pc compared with the year earlier, according to China Customs.

The Chinese manganese alloys market has been sluggish since last June in response to a weak steel market, and prices fell month by month, leading to reduced ore demand.

The top ten manganese ore importers in January were:No. Companies Export volumes (t)1 Tianjin Hoperay Minerals Co., Ltd 165,3372 Shenzhen Shengya Minerals Co., Ltd 112,4973 Shanxi Dongfang Resources Development Co., Ltd 97,8634 Noble Group (Shanghai) 77,2555 CITIC Jinzhou Ferroalloys Co., Ltd 64,8166 Jiaocheng Yiwang Ferro-alloys Co., Ltd 60,4017 Baosteel Resources (Shanghai) Co., Ltd 55,8118 Tianjin Xijin Trading Co., Ltd 50,3299 Guizhou Jinhe Nengda Coal Trading Co., Ltd 46,60610 Shanghai Jinneng International Trade Co., Ltd 46,444

China to monitor energy consumption of ferro-alloys in 2015, no uptick in sightMetal-Pages 23/03/2015

The Chinese government will closely monitor the operation of energy sensitive industries, including aluminium and ferro-alloys this year, the country’s Ministry of Industry and Information Technology (MIIT) said.

Ferro-alloys smelters are required to take measures to improve their production techniques and facilities to lower energy consumption and raise their environmental standards to reduce pollution.

The central government will supervise the implementation of discriminatory electricity tariffs imposed on the ferro-alloys sector in local regions. MIIT’s local authorities will also produce statistics on energy consumption at each smelter.

The move is also aimed at forcing obsolete capacity to quit the market, MIIT said. But industry sources believe that the move will not drive up prices in the near term and instead will put ferro-alloy smelters in a more difficult position.

“The Chinese ferro-alloys industry is facing serious oversupply issues so even though some capacity will be reduced, the market is unlikely to get a boost as the overcapacity is far too large,” said an analyst in Beijing.

“China has eliminated many smaller smelters in recent years, but oversupply remains,” he added.

China’s ferro-alloys capacity is estimated to be nearly 40mn t/yr, with 40-50 pc of capacity idled due to sluggish market conditions.

Higher energy and environmental standards will increase production costs further, while prices of most alloys have been on a downward track in recent years and many markets have already fallen to a new low in the past decade owing to oversupply and flat demand from the steel sector, said a ferro-alloys trader in Guangzhou.

“People in the ferro-alloys industry will have a tougher year in 2015,” said the trader.

China ferro-alloys review – FeCr prices rise on higher tender pricesMetal-Pages 20/03/2015

Ferro-chrome was the only riser in the Chinese ferro-alloys markets this week driven by increased tender prices from TISCO, while prices for other ferro-alloys were unchanged or even edged down in response to a sluggish steel market.

China’s spot prices for imported manganese ore have declined again this week in response to the sluggish manganese alloys market. The ore market is being challenged by oversupply. Additionally, many alloys producers have been forced to cut or halt production this month, leading to reduced ore demand. Market sentiment is downbeat as overseas miners such as BHP have lowered their offer prices in the past two months.

Ningxia Sincerity Manganese, one of the top five high carbon ferro-manganese producers in China, restarted its production on 14 March and daily output will be 300t. A company official is pessimistic about market outlook in the coming month, and prices are expected to edge down in response to lower ore prices and weak consumer demand.

The export market has been flat as producers are mainly carrying out contracts signed in January, and few western consumers are replenishing stocks. POSCO is likely to launch its new tender for manganese in the coming days, and purchase prices are expected to fall further.

In the slow export market, more and more traders have increased their exports via illegal routes. Exporters are required to pay a 17pc domestic value added tax. Prices are at least $50 lower than legal business if tax is evaded.

A number of Chinese ferro-chrome producers have raised prices in recent days, driven by the increased tender price from Taiyuan Iron & Steel Group (TISCO), the largest stainless

steelmaker in China, which raised its tender price for high carbon ferro-chrome for March requirements.

Ningxia Sincerity Manganese restarts FeMn furnaceMetal-Pages 19/03/2015

Ningxia Sincerity Manganese, one of the top five high carbon ferro-manganese producers in China, restarted its production on 14 March and daily output will be 300t.

The furnace was idled at the end of January as the market was sluggish and prices were falling. The company’s annual output of high carbon ferro-manganese is about 100,000t and it is the largest producer in Ningxia province.

A company official is pessimistic about market outlook in the coming month, and prices are expected to edge down in response to lower ore prices and weak consumer demand.

Manganese ore prices in China slip down as alloys sufferMetal-Pages 19/03/2015

China’s spot prices for imported manganese ore have declined again this week in response to the sluggish manganese alloys market.

The ore market is being challenged by oversupply. Additionally, many alloys producers have been forced to cut or halt production this month, leading to reduced ore demand.

Market sentiment is downbeat as overseas miners such as BHP have lowered their offer prices in the past two months.

INDIA back to index

Ford Motor opens its $1bn manufacturing facility in GujaratMetal-Pages 26/03/2015

Ford Motor inaugurated its 240,000 units/yr vehicle manufacturing plant in Sanand, Gujarat.

The $1bn integrated manufacturing facility comprises of a vehicle assembly plant and an engine plant. The vehicle manufacturing plant in Sanand would have an initial capacity of 240,000 units/yr, while the engine plant will have an initial capacity of 270,000 engines in a year. The company has now doubled its yearly installed capacity in India to 610,000 engines and 440,000 vehicles.

Minor metals and ferro-alloys such as ferro-manganese, magnesium, antimony, cadmium, chrome, titanium, tantalum and rhodium are all used in car production. Base and precious metals, such as aluminium, copper, lead, zinc, platinum, palladium and zinc are also widely used in the sector.

Car sales in February witnessed a modest growth despite poor demand and hike in excise duty. Car makers in India are optimistic that increase in the infrastructure activities in the country would boost demand for cars in the long term.

Investors positive on Tata Steel as new mining bill will pave way for increase in capacityBusiness Standard 24/03/2015

Operating earnings to take a hit but new mining Act paves way for rise in capacity, ends many uncertainties

The new mining law is seen as a positive development for Tata Steel, evident from the marginal rise on Monday in the stock price on the BSE.

Production cost might rise due to the mandate that miners will have to pay more for project-affected people. However, investors seem optimistic as the company is to benefit from removal of uncertainties on extension of iron ore, manganese and chrome ore mines. The new Act says existing leases, including the ones under second and subsequent deemed renewal, will be automatically renewed up to 2029-30 in the case of captive mines.

This will bring clarity for Tata Steel, which saw 10 of its iron ore and manganese mine leases go off operations last year, after the apex court called for suspending operations awaiting a second or subsequent renewal, operating under the provisions of deemed extension of lease.

Tata Steel has mining capacities for 32 million tonnes of iron ore, 2.4 mt of chrome ore and 270,000 tonnes of manganese ore.

“Since Tata Steel can now raise its steel production without worrying on iron ore supply, we view the new Bill as a positive,” Motilal Oswal Research said in its report. “We have a 'buy' rating on the company.”

Tata Steel India operations will have a capacity of nearly 13 mt after completion of phase-I of its Kalinganagar project (Odisha's Jajpur district), slated for April-June.

While the new Act is a positive for the sector from a long-term perspective, contribution to the proposed District Minerals Foundation (DME) is the only negative aspect. At peak level, it would raise the cost of iron ore by Rs 300-500 a tonne, said brokerages.

"This (DMF contribution) is likely to increase the cost of steel companies by Rs 480-800 a tonne (depending upon their mix of fines and lumps). The impact, however, will be least for Tata Steel, of three per cent, due to high Ebitda (operating earnings) per tonne at Rs 14,414,” said Edelweiss Securities.

“There might be a maximum of up to six per cent erosion to the company's Ebitda on account of additional cost towards DMF and NMET (National Mineral Exploration Trust),” said Motilal Oswal.

Citing the increased contribution to DMF, to 100 per cent of the royalty amount as against 33 per cent earlier, Kotak Securities has cut its FY17 Ebitda estimates by four to 25 per cent for Tata Steel, Hindustan Zinc and Sesa Sterlite.

Kotak Securities sees Tata Steel's royalty costs (including DMF) more than doubling to Rs 2,600-2,700 crore in FY17 from Rs 1,100 crore in FY14 and maintains a 'reduce' rating on the company.

Tata Steel's domestic operations have been its cash cow for quite some time, also helping service the company's consolidated debt of Rs 70,000 crore. In the December quarter, a fall in realisation and disruption in captive mining operations hit the India operations. This halved the profit to Rs 881 crore from Rs 1,519 crore in the corresponding period last year. Apart from India, Tata Steel has operations in Europe and Southeast Asia.

India Market Report - demand for ferro-alloys remains weakMetal-Pages 20/03/2015

The slowdown in steel prices and depreciating currency have led to a trim in silico-manganese prices this week. Ferro-silicon demand has fallen on account of weak steel market fundamentals and falling profit margins.

Ferro-chrome demand has remained quiet in the past few months and prices have almost bottomed out.

Silico-manganeseIndia's market for silico-manganese saw prices falling this week. The slowdown in steel prices and depreciating currency have led to a trimming of prices. The market remained low key and most market sources do not expect it to change until the next quarter.

The high availability of material in the domestic market and slowdown in exports have put pressure on Indian export prices, but producers said they have reached a floor and cannot lower prices as they do not earn enough to meet production costs and overheads.

The demand from Europe and Japan has been slow. The market is hopeful of a turnaround in the next quarter when demand is expected to improve.

Fire at Andhra Ferro’s plant damages furnaceMetal-Pages 20/03/2015

Ferro-alloy producer Andhra Ferro Alloys has suffered a loss of about INR150 mn due to a fire that broke out early in the morning of 17 March.

A company source said that the fire broke out at the plant due to a short circuit which badly damaged one of the furnaces at the ferro-alloy plant. It would take eight to ten months to repair the furnace, he added.

The company produces silico-manganese and ferro-chrome at the plant. The company has an estimated production capacity of 4,000t /month of ferro-alloys. With the furnace not operating their production capacity is reduced to 3,000t/month.

Chhattisgarh Government cuts central sales tax on ferro alloys by 50pcMetal-Pages 20/03/2015

The Chhattisgarh government plans to reduce Central Sales Tax (CST) on ferro-alloys sold outside the state by 50pc.

The government has decided to reduce the CST on ferro-alloys sold outside the state to 1pc from 2pc and reduce value added tax on re-rolled products to 4pc from 5pc effective 1 April.

The move from the state government on one hand would help the ferro-alloy producers in the state by paying lower sales tax but also help the government in recovering more revenue from these sales in the form of CST, said a ferro-alloy producer.

As per the current estimates of CST at 2pc, tax amounts to about 1,100-1,200/t or more depending on the ferro-alloy sold. With CST reduced about 50pc, it would help producers save on warehousing and other expenses. There are 31 ferro-alloy units in Chhattisgarh and most of them sell their ferro-alloy to outside customers.

A Chhattisgarh-based manganese alloy producer said that though this is a small reduction, it would certainly help ferro-alloy producers in the current market situation. He said that now producers would bill the sale on CST basis and not on consignment or stock transfer basis.

The manganese alloy market has been dormant for quite some months and there are few chances of the market improving in the short term. This reduction is welcomed at a time when ferro-alloy producers are under pressure to sell material at lower cost to consummate sales.

EUROPE back to index

Europe SiMn market set to end month unchangedMetal-Pages 27/03/2015 Cautious outlookThe European silico-manganese market is looking to finish the quarter on an even keel despite current slow demand and isolated cheaper offer prices. Market dealers say much will depend on whether European steelmakers are successful in pushing through price increases for the next quarter after losses in March. If so, then the silico-manganese market should at least find support, if not enough momentum to climb, in the near term. The market has been unchanged since mid-October last year, and has moved about €5t on average since April 2014. European spot prices dropped to a decade-low average in September 2013. Silico-manganese is used in long steel production to make rebar and wire mesh for the construction sector. The world long steels market, a maker of products such as wire mesh and rebar that use silico-manganese, is looking under supply pressure in the near term, according to a monthly outlook from European steel body IREPAS. However, EU steel markets and pricing are more stable. Europe appears to be the healthiest area at the moment, with the weaker euro protecting the market from imports and adding competitiveness to European exports.

Europe FeMn looks to Q2 pick-up in buying activityMetal-Pages 27/03/2015 Q2 pick-up?The European ferro-manganese market has stabilised in the past week after earlier losses this month, with support coming from an expected uptick in steel prices for delivery in the second quarter. This year the European ferro-manganese market has been very quiet, unchanged since the end of last November. Steelmakers have been content this year to rely on quarterly delivery intake of raw materials, while virtually ignoring the spot market that has seen almost all business done on an inter-merchant level. But that may change in the next three months if steel prices bounce and as the second quarter is typically the busiest quarter of the year for steel production. Steelmakers mostly supply long steels to the construction sector and flat steel to the car sectors, with the northern hemisphere summer the most profitable time for both industries.

However, European import business has been at a very low level this year.

New steel AD duties set to benefit EU ferro-alloys demandMetal-Pages 26/03/2015

Price revivalNew EU anti-dumping duties imposed on stainless steel imports from China and Taiwan this week will benefit European ferro-alloys consumption from the second half of this year as steel output levels in Europe are climbing to make up the expected shortfall from Asia.

The EU will apply tariffs of up to 25.2pc for sheet, coil and strip imports from China and up to 12pc for Taiwanese product, after a complaint lodged in May last year from the European steel producers association, Eurofer. Planned closures should push capacity utilisation at European steelmakers to above 80pc in 2017, from 64pc last year, with a further boost from lower import levels. Imports from the two countries more than tripled from 2010 to 2014, Eurofer said, due to their respective overcapacities instead of market growth in Europe. The duties, set by the European Commission, are provisional pending the outcome of an investigation due to end in September. Anti-dumping duties typically cut imports from the affected countries, which should, in theory, boost domestic production levels in European stainless steel. That should also benefit the consumption of raw materials, such as ferro-chrome, ferro-silicon and ferro-molybdenum, used in stainless steel production in the coming months. Spot ferro-chrome prices in Europe appear to have found a floor after a run of losses in recent months, while ferro-molybdenum and ferro-silicon have started to recover in recent weeks after a lengthy spell of market weakness and stagnation. European ferro-alloys spot activity, which has been very quiet so far this year, should increase in line with steel demand in the coming months. Material set aside for spot sales may well be used in longer term quarterly delivery settlements, with further supplies sought for the free market. The European steels sector will be watched for further results of pending anti-dumping investigations. The European Commission has also been conducting an anti-subsidy investigation against stainless steel cold-rolled imports from China and the provisional results should be made known in two months‘ time.

CIS back to index

Depreciation shelters Ukraine ferro-alloy producers from higher power pricesMetal-Pages 25/03/2015

Although Ukrainian electricity prices have been rising since the beginning of this year, for the time being local ferro-alloy producers are sheltered from the impact of the higher costs due to the weakening of the local currency, the hryvnia.

Ukraine produces electricity from coal and nuclear power and to a lesser extent from hydro-power and gas. Gas is more frequently used for co-generation of heat and power and for district heating.

The gas is mostly imported from Russia and before the conflict with Russia, Ukraine mainly relied on its own coal supplies from the Donetsk basin. But with infrastructure damaged and transport interrupted by fighting in the east of the country Ukrainian power producers are cut off from their coal supply and have to import the commodity from Russia.

Like in most of the rest of the CIS, industrial infrastructure and the national grid have been built in such a way that they link Ukraine to Russia and not the rest of Europe, which makes it difficult for Ukraine to import electricity. The cost of electricity has shot up and for the time being the government is shouldering the price rise but with the country’s budget being stretched to breaking point already it will not be able to continue to do this for long.

Consequently, Ukraine is looking to reform its power market by 2017 so that all users pay a market price rather than a subsidised price. For local ferro-alloy producers this has meant that the memorandum of understanding with the national power supplier which has been in place in 2014 has not been renewed when they expired in December. The agreement allowed producers to buy electricity at export prices, which are cheaper than regular domestic prices because they do not include social payments.

For the time being, ferro-alloy producers are sheltered from the impact of higher electricity prices, which make up between 30pc and 40pc of their production costs, because the local currency, the hryvnia, weakened sharply since the beginning of the conflict with Russia, officials at the Ukraine Ferroalloy Association told Metal Pages. A year ago the hryvnia traded at USD/UAH11.00, then spiked briefly to over USD/UAH30.00 in February and now settled at around USD/UAH23.00.

So now, although the cost of power is higher in hryvnia terms it has remained stable in dollar terms.

At present the bigger worry for local producers, who produce ferro-manganese, silico-manganese and ferro-silicon, is the decline in ferro-manganese prices since the beginning of the year and Russia’s anti-dumping and counter-veiling case against Ukrainian silico-manganese producers. Officials at UkrFa expect a hearing to take place in Russia in the next few months.

Kosaya Gora Iron Works restarts operations at third furnaceMetal-Pages 19/03/2015

Russian iron ore and ferro-manganese producer Kosaya Gora Iron Works said its third blast furnace re-started work after a period of repairs designed to increase production levels this year.

The plant is now operating all three of its furnaces at a normal running rate.

The repairs done on the furnace included upgrades to electronic controls, the supply of gas and electricity and the raw material supply line.

Kosaya Gora produces high-carbon ferro-manganese, which is used in steel making and engineering industries as a deoxidiser and alloying addition. The company mainly supplies Russian steel makers but also exports to Belarus and some other CIS countries.

Ukraine's SiMn production up 5.5pc, FeSi output halved in Jan-FebMetal-Pages 18/03/2015

Ukraine’s Nikopol and Zaporozhye ferro-alloy plants produced 132,700t of silico-manganese in the first two months of this year, an increase of 5.5pc from 125,800t in January-February 2014, according to the latest data from Ukrainian Ferroalloy Producers Association (UkrFA).

Meanwhile, output of ferro-silicon fell by half due to loss of production from the Stakhanov Ferroalloy Plant which closed amid fighting in separatist Luhansk region.

All of the increase in silico-manganese output was due to Ukraine’s largest producer Nikopol Ferroalloy Plant devoting capacity to boosting silico-manganese volumes while reducing its production of ferro-manganese. The plant produced 107,600t of silico-manganese and only 2,000t of ferro-manganese in the first two months of 2015, compared with 71,600t of silico-manganese and 8,200t of ferro-manganese in the same period last year.

Together with Zaporozhye smelter, also controlled by Ukraine’s Privat industrial-financial group, which increased its ferro-manganese output by 1,000t, Ukraine’s ferro-manganese production totalled 12,100t in January-February 2015, down from 17,300t in the first two months of 2014.

Production of ferro-manganese was roughly steady between January and February this year as UkrFA told Metal-Pages the plants had coped with load shedding during Ukraine’s winter electricity shortage by accumulating electricity at night for use during day shifts.

Meanwhile the shutdown of the Stakhanov plant in Luhansk region since it was overrun by separatist forces last year resulted in a 50.5pc drop in ferro-silicon production in the first two months of 2015.

Although the Zaporozhye smelter more than doubled its ferro-silicon production from 6,400t to 14,300t, this was not enough to offset the loss of output from Stakhanov, which had been the largest ferro-silicon producer in Ukraine. With Zaporozhye Ferroalloy Plant as the sole producer, output in the first two months was down from 29,800t produced by two plants in the same period last year.

The Zaporozhye plant has also started producing electrolytic manganese metal, with output totalling 2,100t in the first two months of 2015. February production totalled 900t, from 1,200t reported for January.

On the raw materials side, the Marganetsky Ore Mining and Processing Complex ramped up manganese ore concentrate production from 30,800t in January to 33,600t in February. This brought production for the first two months of the year to 64,400t, still down from 121,000t produced in the same period last year.

Meanwhile the Ordzhonikidze Ore Mining and Processing complex resumed output of manganese ore pellets in February, with production totalling 27,200t, up from 15,100t in February last year.

OCEANIA back to index

Eclipse Metals has early cash flow potential at Mary ValleyProactive Investors 27/03/2015

Eclipse Metals (ASX:EPM) could have early cash flow from its Mary Valley Manganese Project in Queensland after receiving positive confirmation of potentially saleable ore from the historical stockpiles.

The company is also preparing to carry out a 12 hole diamond drilling program to test exploration targets for near-surface mineralisation. Shallow exploration targets beneath and adjacent to historic workings could host more than 37,000 tonnes of mineralisation with grades up to 52% manganese to less than 15 metres depth.

This follows the third phase of exploration, which has determined the orientation, control and style of the manganese mineralisation.

Petrographic and petro-physical studies of rock samples, including specimens of mineralisation and waste, will be completed as part of a broader investigation to optimise processing of mineralisation extracted from the historic Amamoor Manganese Mine workings.

“The board is excited to have received such positive confirmation of potentially saleable ore from the historical stockpiles,” executive chairman Carl Popal.

“With a cost effective beneficiation process, the company would have an immediate cash flow. The proposed drill holes will provide confirmation that the near surface mineralisation can potentially be mined by open-cut methods.

“Proximity of the project to major infrastructure and the port of Brisbane supports the commercial value for Eclipse to move to the next phase of exploration and development at Mary Valley.”

The Mary Valley Manganese Project comprises two tenements located 14 road kilometres southwest of Gympie in Queensland and about 165 rail kilometres from Brisbane.

These have historic production of over 31,000 tonnes of ore grading 42% to 51% manganese from mining operations carried out during the 1920’s and 1960’s.

Historical Mine DumpsThe project has several historic mine dumps containing a mixture of mineralised rock and waste rock.

The three largest historical mine dumps containing a total of about 1350 square metres of rubble were sampled during the recently completed fieldwork.

Assays ranging from 0.55% to 42.31% manganese with a mean of 13.27% manganese were returned from a total of 35 samples.

Material from the waste dumps, along with mineralised rock from the workings, will be supplied to consultants for petrographic examination and petro-physical testing to determine the mineralogical and physical characteristics of the mineralisation and host rock.

This will be an important part of the company’s investigation to determine exploration methods and processing requirements of mineralisation which may be mined from the Amamoor workings.

These dumps will provide initial bulk samples and may constitute an initial source of saleable ore.

Exploration ProgramA program of 12 vertical diamond drill-holes is proposed to test the down-dip continuation of mineralisation below what could be removed from excavations 5 metres deep.

Assuming continuity of dimensions and grade, it is possible that an additional 7,900 square metres (more than 27,000 tonnes) of mineralised rock occurs within 50 metres of workings, to a depth of less than 15 metres from the surface.

These drilling-targets are merely those parts of mineralised lenses that are closest to the workings and closest to surface. The mineralised lenses are interpreted to extend beyond the immediate conceptual target zone.

Mary Valley Manganese ProjectThe Mary Valley Manganese Project offers Eclipse the opportunity to identify additional mineralisation in largely under-explored tenements with historic production.

Despite historical production, little to no geological activity has been recorded over the Mary Valley prospects for manganese in the past 50 years.

Historical Amamoor manganese mine workings constitute a brownfields project with potential for readily mineable mineralisation on or near surface.

Old waste dumps and stockpiles could provide bulk samples and possibly saleable ore to evaluate potential for full-scale mining.

Based on a Cuban style model, the potential resource of manganese mineralisation available at Amamoor could be significantly higher.

Historical near surface production has been reported as up to nearly 20,000t at up to 51% manganese between 1920 and 1960.

The mineralisation style shows similarities to the Woodie Woodie deposit.

Amamoor Manganese MineThe historical Amamoor Manganese Mine workings are on the top and eastern side of a ridge mostly composed of volcanic rock.

There are three groups of workings – the Northern Workings, Central Workings and Southern Workings, each of which consists of a series of narrow, shallow excavations made sub-parallel to the ridge.

These excavations enabled mining to follow the tabular lenses of manganese mineralisation down slope.

Eclipse Metals has identified eight lenses of manganese mineralisation.

The thickness and orientation of the lenses of manganese mineralisation in the Amamoor mine workings, along with historic evidence and likelihood that mineralisation is of the Cuban-type, supports the idea that mineralisation continues down-dip, below and beyond the present workings.

In most cases, there is likely to be only 5 metres to 10 metres overburden.

AnalysisShares in Eclipse Metals should trade higher today after it identified potential for early cash flow from historic stockpiles at its Mary Valley Manganese Project.

Exploration to date has confirmed that these contain potentially saleable ore that when combined with a cost effective beneficiation process could provide immediate cash flow.

The company is also preparing to carry out a 12 hole diamond drilling program that will test exploration targets for near-surface mineralisation that can be mined by open-cut methods.

AFRICA & MIDDLE EAST back to index

Burkina Faso orders halt to production at manganese mineMetal-Pages 26//03/2015 Production stoppageBurkina Faso has told a unit of Timis Mining Corporation, Pan African Minerals (PAM), to stop production while it reviews the permit that was granted to the company to develop the Tambao manganese deposit, one of the biggest manganese mines in the world, at a cost of $1bn. The country's mining ministry has said that the mining licence has not been revoked. The work has stopped so the government can review how the permit was awarded, a senior company official at PAM told Metal-Pages from South Africa. The mine has been shut since late last year, he said. Burkina Faso’s transitional government is reviewing mining contracts awarded under former President Blaise Compaore’s 27-year rule.

Protesters ousted Compaore in October last year. Presidential elections are scheduled for this October. The manganese mine in the north of Burkina Faso, a landlocked country in West Africa near the border with Niger, Mali and Ghana, is reckoned to contain more than 100mn t of the metal. Tamboa is a priority for the country's government as it seeks to diversify its economy away from reliance on gold and cotton. PAM won exploration rights for the site in 2012 but the government only granted the exploitation permit last May. Annual production is provisionally forecast at around 3mn t. The commodity was due for sale on international markets starting from around January this year. Pan African Minerals agreed to build a 210km (130 miles) railway to Tambao as part of the development of the manganese deposit. PAM has so far exported about 2,000t of manganese.

S Africa power utility Eskom hit by triple whammy of bad newsMetal-Pages 25/03/2015 Light at end of tunnel?South Africa’s struggling power utility Eskom has been engulfed by a triple-whammy of negative developments today – it has implemented Stage 2 load-shedding from 4pm to 10pm due to maintenance and technical issues. It has also been hit by a one-day strike at its Medupi power station, and its board is holding a no-confidence vote in its chairman.

Although the country’s power supply has been relatively stable over the past few weeks, without any major impact on metal and alloy producers, there are growing signs that another period of regular power outages could emerge as Eskom deals with a wide range of problems. Stage 2 is the second highest level of load-shedding, with Stage 3 the highest before a general blackout takes place. Earlier this week, Public Enterprises Minister, Lynne Brown, told parliament that power outages were costing the economy between $1.7bn and $6.8bn a month. She also said she was “concerned” about management at Eskom which is wholly government-owned.

Under two weeks ago, Eskom’s CEO and three top executives were suspended, pending an independent investigation into certain practices within the utility, but today the board is voting whether or not the chairman should be permanently ousted from his position.

Compounding Eskom’s problems, workers at the Medupi power station, which is already more than two years behind schedule, have embarked on a one-day strike for better wages and working conditions.

Last week ratings agency Standard & Poor’s downgraded Eskom’s credit to junk status, making it even more difficult for the utility to raise capital to plug its funding shortfall of more than $20bn.

Cash-strapped Eskom seeks further 25.3% hike in power pricesMetal Bulletin 25/03/2015

South Africa’s embattled electricity supplier, Eskom, has requested a further 25.3% hike in its tariffs over the next three years on top of existing tabled increases.

This bodes ill for the South African mining and manufacturing industries, according to Elton Bosch, gm and energy consultant at NUS Consulting Group in Johannesburg.

South Africa is a major producer of power-intensive products such as aluminium, ferro-chrome and manganese alloys. Ferro-alloys producers have been particularly hard-hit in recent years by falling prices and higher production costs.

Eskom confirmed on March 21 that it has requested a "selective" tariff reopening from the National Energy Regulator of South Africa (Nersa). Nersa approves an average tariff increase for five-year periods, the latest being for the period 2013 to 2018. Nersa approved 8% per year for this period, after Eskom requested 16%.

However, last year Nersa approved an additional tariff increase from April 1 2015, bringing tariffs up by 12.69%, instead of 8%, to claw back cash shortfalls for the utility.

The latest tariff increase request would take effect in July, if it succeeds, and would see power rates lifted by a further 9% in 2015/2016, 9% in 2016/2017 and probably about 7% in 2017/2018, NUS’s Bosch calculates.

Very slippery slope "If the cost of my widgets, which are manufactured locally, suddenly goes up by 22%, I know what I’ll tell you," Bosch said. "Manufacturing, in particular, will suffer. It can only swallow so much."

Mining and beneficiation companies will have only one option, he added, which will be to cut production even further, or close smelters altogether, as Assmang recently did. This will have knock-on effects on other inputs, such as labour.

"The tariff request is not yet a done deal," Bosch said. "However, if it does go through, we’re on a very slippery slope."

Eskom’s latest request is to help it fund the purchase of expensive supplies of diesel fuel, used to run the gas turbines that keep the national electricity grid from all but collapsing because its coal-fired power stations are not in a good-enough state to cope with the country’s power demand.

Eskom said on March 19 that it was 28% down on its capacity and had no reserve margin to meet extra demand. The international norm is for electricity firms to have a margin of 15% spare capacity.

JunkStandard & Poor’s (S&P) downgraded Eskom’s long-term credit rating on March 19 to the lowest investment grade of BB+ from BBB-. This is considered non-investment grade or junk.

In November last year, Moody’s Investors Services cut Eskom’s long-term credit rating to junk status. This leaves only Fitch that has not given Eskom a junk rating.

The utility is in dire financial trouble. It has a cash hole of ZAR255 billion ($19 billion). Its majority shareholder, the SA government, pledged ZAR20 billion to bail out the company.

Last week, senior officials, including the recently appointed ceo, Tshediso Matona, were suspended, as chairman Zola Tsotsi launched a probe into Eskom’s poor performance.

Pallinghurst shares rise on triple performance in troubled timesMining Weekly 24/03/2015

The shares of diversified mining company Pallinghurst rose by more than 4% in Johannesburg on Monday after the company reported a rise on the performance of its platinum, manganese and coloured gemstones business units during troubled times.

In the 12 months to December 31, the JSE-listed company’s profit was $55-million and its net asset value 35% higher after its Sedibelo Platinum operations recorded their first full year of profitability, along with three-million fatality-free shifts.

“In a year where the industry found itself in troubled times, I am pleased to report profits for all our three business platforms,” CE Arne Frandsen reported in a stock exchange news announcement, which saw the Pallinghurst share price rise to R3.50 a share by the close.

With current commodity prices low and pessimism widespread, it has been the strategy of executive chairperson Brian Gilbertson to position the company to realise value even in the weakest of markets.

Sedibelo Platinum achieved another production record in 2014 with yearly dispatches of 154 400 oz of 4E (platinum, palladium, rhodium and gold) platinum-group metals (PGMs).

The separately Aim-listed Gemfields coloured gemstone business, which has the world’s largest emerald mine, Kagem, in Zambia, generated $77-million revenue from its first two auctions of rubies from its Montepuez mine inMozambique and is looking to do as well in sapphires though exploration in Sri Lanka.

Bulk sampling at Montepuez saw markedly increased ruby production during the scaling-up of its operations and Gemfields continues to unlock Fabergé’s growth potential with improvements in its financial metrics and the recent unveiling of the Fabergé Pearl Egg.

Gemfields’ strong revenue generation has been reflected in its share price, which increased by 40% during the year.

In addition, the Tshipi Borwa manganese mine in the Northern Cape doubled its export volumes to two-million-plus tonnes of manganese from a management team that has demonstrated the mine’s capability to produce at a rate of three-million tonnes a year if solutions can be found to resolving current transportation constraints.

Tshipi Borwa has been developed rapidly with support from Ntsimbintle, headed by struggle luminary Saki Macozoma.

“Each partner in the venture brought unique skills to the operation and its own financial backing, surely one of the finest examples of a black economic-empowerment (BEE) partnership in the South African mining industry,” Gilbertson commented, while also crediting the Bakgatla Ba Kgafela for providing a BEE tailwind for the company’s PGMs business, which has added 100-million ounces of 4E PGMs to its resource base.

Sedibelo is also testing a potentially industry-transforming range of energy-slashing beneficiation technologies involving a low-energy hydrometallurgical alternative to high-energy smelting.

The environment-friendly Kell process, which Pallinghurst has been studying over a prolonged period, requires only a fifth of the electricity required for conventional smelting and has the potential to increase the recoveries from PGM concentrates.

Initial test results at the platinum mine in the North West province have been positive.

Patented by former Mintek researcher Keith Liddell, the Kell process is said to remove the need to melt PGM concentrate at a high 1 600 oC temperature.

Instead, it consumes a mere 140 kWh of electricity for every ton of concentrate processed, compared with 1 000 kWh of electricity for every ton of concentrate smelted, recovering 99%-plus of the platinum and 98% of the remaining PGMs, as well as the base metals.

It requires no milling and emits only 440 kg of carbon dioxide (CO2) a ton of concentrate treated compared with 1 400 kg of CO2/t for the estimated two-million tons of concentrate treated in South Africa a year.

The technology is also said to cope well with the chromite in the upper group two reef, which smelting finds problematic.

The main reason why Kell consumes so little power is that waste goes through the process without consuming any electricity.

“Although commodity prices are currently depressed, our robust operations should withstand the storm, even for an extended period. Each of our operations is well positioned to deliver its full value for shareholders when the upturn comes, as surely it will,” Gilbertson commented.

Pallinghurst almost trebles annual profitBdLive 23/03/2015

PALLINGHURST Resources, a holding company of a diversified mineral portfolio, more than trebled its annual profit to $55.4m following strong performances in its suite of assets.

Pallinghurst reported net profit of $55.4m for the year to end-December compared with $14.7m a year ago, with its investment portfolio and income generated from operations growing to $62m from $21m.Its shares traded 4% higher at R3.50 from midday.

Pallinghurst is invested in the Sedibelo Platinum mine and the Tshipi Borwa manganese mine in SA as well as London-listed Gemfields, a producer of emeralds and rubies in Zambia and Mozambique, respectively.

There was currently "widespread pessimism" in the global resources industry, said executive chairman and chief operating decision maker at Pallinghurst, Brian Gilbertson.

"Although commodity prices are currently depressed, our robust operations should withstand the storm, even for an extended period. Each of our operations is well positioned to deliver its full value for shareholders when the upturn comes, as surely it will," said Mr Gilbertson, the first CEO of BHP Billiton when the largely South African assets of Billiton were merged with those of Australia’s BHP.

The Sedibelo mine, which is immediately north of the Pilanesberg nature reserve, produced 154,400oz of four platinum group metals in the year.

"Sedibelo Platinum Mines also registered its first full-year profit and has performed well into 2015," said Pallinghurst CEO Arne Frandsen.

The Tshipi Borwa manganese mine in the Northern Cape doubled output to more than 2-million tonnes. Mr Frandsen described the mine as one of the largest manganese mines in the world.

This was a remarkable achievement given that Tshipi Borwa, which only commenced production a little more than two years ago, had continued to operate profitably despite the recent decline in the manganese price," he said.

Gemfields reported a strong year, with the addition of ruby sales for the first time.

Pallinghurst has been clear since it was formed in 2007 that it was not a long-term holder of its assets."Although the current market environment is not necessarily conducive to divestments at optimal value, we continue to prepare the assets for eventual exit," Mr Frandsen said.

S Africa Mn ore output projected to grow to 16mn t by 2019Metal-Pages 20/03/2015

South Africa’s output of manganese ore is projected to triple to around 16mn t by 2019 as several expansions and new projects come on stream in the country’s Northern Cape province.

Unveiling new locomotives for Transnet, the state-owned rail utility, its chief executive, Brian Molefe, who made the projection on Thursday, said Transnet’s expanding rail fleet would be able to transport manganese ore to ports for export and to smelters for beneficiation into ferro-manganese.

He estimated that South Africa will this year produce around 5mn t of manganese ore, some of which will be beneficiated, the rest exported in sinter form. Metal-Pages believes this estimate is too conservative.

While South Africa’s manganese industry has for many years been dominated by Samancor and Assmang, several new players have recently entered the market, such as Tshipi Borwa, Kalagadi Manganese and Kudumane Manganese Resources.

The country’s manganese reserves are estimated at around 15bn t, all situated in the Hotazel region of the Northern Cape province. This area contains around 75pc of the world’s known manganese ore reserves.

Rail capacity is seen as a major enabler of growth in the industry which is hundreds of kilometres from ports such as Port Elizabeth and Coega and also far away from smelters.

Despite the strong outlook for the growth in manganese output over the next five years, the industry is currently struggling against a backdrop of low commodity prices and rising input costs.

Assmang last week said it may lay off some workers at its Black Rock manganese mine and it also said it would place a ferro-manganese smelter on care and maintenance from April at Machadadorp in Mpumalanga province.

It was also reported last month that Kudumane Manganese Resources, which has a large Hong Kong investment link, has been placed under court approved supervision ahead of business rescue.

Kalagadi Manganese, one of the newest entrants to the manganese market, is expected to produce around 3mn t/yr of manganese ore, translating into 2.4mn t of high grade sinter. It also plans to build a smelter at the port of Coega to produce 300,000t/yr of high carbon FeMn.

Tshipi Borwa, another recent entrant to the market, is targeting annual manganese ore production of around 2.5mn t, but believes there is potential for another mine in the Hotazel area.

During its interim results presentation earlier this week, African Rainbow Minerals, which owns half of Assmang, said the company was planning to expand its annual manganese ore output from around 3.2mn t to 4.6mn t over the next few years, in line with Transnet’s expansion of rail transport capacity.

S Africa metal and alloy producers face sharp electricity, fuel price risesMetal-Pages 19/03/2015

South African metal and alloy producers are facing a double whammy of cost rises from the beginning of April with electricity tariffs and fuel prices surging.

Electricity tariffs will rise by an average of 12.7pc while petrol and diesel prices will jump by up to 15pc as a result of a major increase in the fuel levy and the weakness of the rand against the dollar. A massive 62pc of the increase in the overall fuel levy will be going to the bankrupt Road Accident Fund which is meant to compensate victims of road accidents.

Further bad news for intensive users of electricity, such as furnaces, smelters and mines, is that the special electricity levy introduced a couple of years ago, will also rise by 2c to 5.5c per kWh. This temporary increase in the electricity levy, which is basically a penalty on electricity consumption, will remain in force until a carbon tax is introduced, possibly in 2016.

The electricity levy is aimed at promoting energy efficiency and encouraging lower greenhouse gas emissions in the absence of a carbon tax. A draft carbon tax bill will be introduced later this year for a further round of public consultation.

Significantly, energy and fuel are major contributors to the overall input costs of metal producers and mining companies, so these sharp tariff and price rises will negatively impact their cost bases.

Eskom, the country’s beleaguered state-owned power utility, was granted a double digit tariff increase to claw back some of its additional costs associated with maintaining its ageing power stations and building two new power stations. Power tariffs were only meant to increase by 8pc a year until 2017/18, but a special increase was granted for 2015/16.

Good news for some companies in the metals and mining arena is that the National Treasury’s energy efficiency savings tax incentive has been increased from 45c per kilowatt hour to 95c and will be extended to power co-generation projects.

This will benefit companies such as ferro-chrome producer International Ferro Metals which is in the process of recommissioning a co-generation plant to cut its reliance on the national power grid by 10pc.Fellow ferro-chrome producer Glencore Merafe, which runs a massive integrated chrome and ferro-chrome joint venture, has installed energy efficient technology at its 360,000t/yr expansion project which will be fully commissioned by June.

Gold producer Sibanye has announced a plan to build its own solar power plant and its own coal-fired power station to reduce its reliance on Eskom which is constantly cranking up its power tariffs beyond the rate of inflation.

AMERICAS back to index

Some US bulk alloy prices fall; ferro-chrome gainsMetal Bulletin 22/03/2015

US prices for some bulk alloys ticked down this past week as spot activity remained thin, although high carbon ferro-chrome notched a surprising gain in a tough environment.

High carbon ferro-manganese fell, with one trader saying that the market is under "tremendous pressure" due to falling demand as well as lower global numbers. Further price dips could subsequently be on tap.

Other bulk alloy prices saw no movement, with silico-manganese steady, medium carbon ferro-manganese unchanged and low carbon ferro-manganese holding.

Low carbon ferro-manganese was said to be in short supply and price increases likely as some suppliers have left that market and automotive demand is still robust, according to market sources.

US FeMn market slips, seen vulnerable on weak steelMetal-Pages 19/03/2015 Weak supportThe US ferro-manganese market has been quiet in March amid sliding prices in the steel sector, which has been struggling against a heavy rate of competitively priced imports. US refined alloys are selling at more than a 20pc premium to high carbon material due to stronger production costs. US steel production has been falling this year as mills slash capacity rates in the face of strong import levels, according to latest figures from the American Iron and Steel Institute (AISI). Domestic liquid steel production for mid-March saw steel mills operating at an average capacity utilisation rate of 68.7pc, a low last seen in 2009 when metals production slumped in the West a year after the economic crash. The US steel industry has been struggling as steady end-market demand is offset on a steadily strengthening dollar versus many other currencies. The strong dollar is attracting imports and making exports less competitive. US steel shipment levels dropped almost 3pc this January compared with the month before, to 7.76mn t, according to AISI data. US steel mills are expected to push for anti-dumping duties on imports of rebar and pipe and tube steel products in the coming months as the market is more pressured, sources said. Even US steelmakers seen as being highly efficient such as Steel Dynamics and Nucor are struggling to compete with rebar prices in the US at present. Typically, when such probes are announced the level of imports falls very quickly, and domestic producers know it will buoy their prices in the short term. Further downward pressure on steel and ferro-alloys prices has been applied to steady falls in scrap prices. Virtually all steel production in the US is made in EAFs (Electric Arc Furnaces). EAFs use only steel scrap, which is in plentiful supply at steel mills, as are stocks of finished products and that level of supply is not expected to turn until late in the next quarter. Until then, industry sources expect steel and raw materials prices will be vulnerable to further losses.

SiMn market vulnerable to price losses on weak steelMetal-Pages 19/03/2015 Weighed downUS silico-manganese spot prices have been cautiously stable this month, although weak steel markets, particularly in rebars, pipe and tubes, is undermining raw materials markets and that pattern is expected to hold in the next couple of months at least. The underlying weakness in steel prices and heavy rate of competitively priced imports was spotted in January and has been dragging on the market ever since. That impact will drag on steel and ferro-alloys prices in the US in the coming weeks, sources said. The market may stabilise in the third quarter as prices will be close to production costs,

although it may be next year before any bounce in prices is seen as the steel market will take some months to recover. Spot business to consumers is expected to be at a nominal level in Q2. Silico-manganese is used in long steel products such as rebar and wire mesh that are then used in the construction sector. There have been big volumes of rebar imports arriving in the US this year, and US production cuts in that market are expected. Anti-dumping moves are seen in the coming months. With current steel industry utilisation rates below 70pc and several US Steel facilities already offline for maintenance or being temporarily idled, it will leave ferro-alloys prices in the US vulnerable to losses. Brittle steel marketsIn the US, the steel rebars market in the US increased to almost 8mn t last year in 2014, although imports at competitive pricing have resulted in strong competition, according to a recent report from steel industry body IREPAS. The IREPAS report also noted falling steel scrap prices this year and into 2016 in the West as being influential on the long steels market. The international scrap market turned sour at the end of January when it became clear that US recyclers had held back material from the end of 2014 to keep domestic prices elevated. In terms of domestic production, Felman Production recently idled one of its furnaces for maintenance and upgrades until early May this year. Felman Production has also filed an anti-dumping petition against silico-manganese imports from Australia. Last week the United States Department of Commerce (DoC) announced it will start an anti-dumping investigation of imports of silico-manganese from Australia. The DoC said that the US International Trade Commission (ITC), which started its probe into the case late last month, is scheduled to make its preliminary injury determination on the case or before 6 April, this year. Commerce already has anti-dumping orders in effect against silico-manganese imports from India, Kazakhstan, Venezuela, China, and Ukraine. Silico-manganese is used mostly in steel production as a source of both silicon and manganese, and sometimes as an alloying agent in the production of iron castings. It is used in long steel products such as rebar and wire mesh for use in the construction industry.

GENERAL INFORMATION back to index

Slower growth in global steel output dampens ferro-alloy markets: Latest AnalysisMetal Bulletin Research 26/03/2015

Further weakness over the past month in most alloy markets comes as little surprise amid declining global crude steel production in the first two months of 2015. As steelmakers adjust production rates, they are concurrently scaling back ferro-alloy consumption. The industry is approaching the traditionally stronger second quarter for steel consumption and production, and in turn ferro-alloys demand, however, we do not expect any rapid reversal in the general flat to downward trend in ferro-alloys pricing in the near term. Over-supply for most alloys together with currency fluctuations will limit potential pricing gains in the coming quarter.

Pricing floors appear to have been reached in several specialty alloy markets, however, with both ferro-tungsten and ferro-molybdenum prices improving over the past month. While price improvement is encouraging, we remain cautious regarding the future outlook for these two

markets, both of which will be characterised by significant supply additions in the coming year.

US ferro-alloy prices will remain vulnerable in the near term as carbon steelmakers adjust production to help their market find a pricing floor. In addition to the negative repercussions on prices of reduced demand from steelmakers, we do not foresee any reversal in the persistent strength of the US dollar versus other major currencies. Together with disappointing demand in other key ferro-alloy consuming markets, the strong dollar will make the USA the most favoured destination for the world’s excess ferro-alloy supply. We maintain the view that the US steel market will hit bottom and begin to improve in the next 4-6 weeks, but ferro-alloy markets are likely to struggle until that time, and perhaps even longer as steelmaker production adjustments will take time to implement.

Poor supply discipline and precarious demand growth shake the market: Manganese HighlightsMetal Bulletin Research 26/03/2015

Global growth appears to be moving at a sub-trend pace, while business survey readings are consistent with moderate growth, and world trade remains slow. There is still no clear evidence that the expected economic upturn from 3.0% to 3.5% growth by the end of the year has commenced. That said, steel sector activity traditionally picks up in the second quarter to help feed construction demand in the northern hemisphere. This year, however, the Chinese property market is flagging, while tougher environmental checks are likely to affect steel production and dent demand for manganese. Furthermore, we would expect import pressure to continue building in the USA, given that divergent global monetary policy expectations will bolster the dollar in the months ahead. On balance therefore, prices seem set to stagnate with the prospect of a small rally at the end of April. Nevertheless, for the remainder of the year the market will likely remain in the doldrums.

A lacklustre global economy and softer steel prices are making mills nervous about replenishing manganese alloy stocks. Steelmakers are increasingly focused on tailoring output to demand, to help ease the pressure on the steel market. In contrast, ferro-alloy producers appear to be lacking supply discipline; production in China grew by 1.48% year-on-year to 5.3Mt in the January-February period. In the USA, high manganese alloy import volumes are frustrating local producers. The effect of the strong US dollar is seen as a major pull factor for foreign producers.

The US silico-manganese price remains stable, while in Europe spot prices are holding. In contrast, high-carbon ferro-manganese prices fell in both regions. Medium-carbon ferro-manganese prices are unchanged in both markets.

Manganese alloy prices are also succumbing to currency factors and over-supply. The US Commerce Department and the US International Trade Commission (ITC) have both initiated anti-dumping duty investigations into silico-manganese imports from Australia following a complaint by domestic producer Felman Production. The ITC’s preliminary determination is due on or before April 6, with the Commerce Department scheduled to make a preliminary determination by July 29. With the US market now under threat, we understand Australian silico-manganese shipments are increasingly being diverted to Asian (ex-China) markets.

Increased flows of Australian silico-manganese to Asia are occurring just as Indian silico-manganese suppliers are diverting material to Asia as well, given the anti-dumping investigation underway in Europe against imports of Indian silico-manganese. Meanwhile, the weakening of local currencies versus the US dollar is enabling Indian silico-manganese producers to cut prices in order to move material, with the losses less severe in local currency terms.

On the supply side, ore volumes have been elevated. According to data from the Brazilian Foreign Trade Ministry, export material during the February period increased by 75.3% year-on-year to 88.5kt, with France receiving the lion’s share at 80%. Nonetheless ore imports into

China over February fell, both on a month-on-month and yearly basis, by 37.5% and 16.1% respectively, to 0.95Mt. Though given the slackness in Chinese demand, port inventories have been mounting. Several ferro-alloy producers in China are reported to have decided against buying ore in the coming month. Metal Bulletin’s manganese ore index (44% Mn) fell 2.5% month-on-month.

Mn ore supplies to drag on prices in medium term - reportMetal-Pages 25/03/2015

Subdued outlookManganese ore supply is struggling for any growth and with existing mines having mostly ramped up capacity and debottlenecked effectively in the past couple of years, most are looking at a period of stagnation, according to the latest industry report from Macquarie Bank. "Moreover, we expect further cuts to Chinese and Australian output into the medium term," it said in an email to Metal-Pages. Moreover, since the 12pc mine production surge in 2013, the bank reckons world stock levels have increased more than 1.5mn t. "The first thing the manganese market has to do is pare back the level of oversupply, before moving towards balance and eventually running down ore stocks," it said in the report. "With little pressure to cut supply ex-China, this process looks set to be a prolonged one, with world inventories struggling to start drawing until 2018 on our base case. Certainly, the probability of a raw material constraint in manganese over the coming years, absent a major supply shock from South Africa, is pretty low." Demand strengtheningHowever, the demand environment looks little better, given the slower growth rates of both Chinese and world steel production, it said. The current half (of the year) should mark the nadir in the demand growth rate, as MacQuarie expects a drop of 2pc in world consumption. Through 2019 the absolute increase in manganese consumption within alloys is only likely to reach about 1mn t of manganese contained alloy. Still, stainless steel demand is set to increase further, it said, adding 600,000t of manganese-contained products to world demand on a 5-year view. Price forecastMacquarie's manganese price forecast in the next three years is based on its estimates of the marginal cost of South African production. "Beyond that, we do see steady price appreciation as ore stocks finally start to draw (down)." However, that forecast is 20pc below its older 2015 forecast, and 14-18pc lower for all future years, it said.

BHP Billiton advises shareholder approval for demergerMetal-Pages 24/03/2015

New spin-offDiversified world metals and mining company BHP Billiton has recommended that shareholders approve the proposed spin-off of its new mining group South32. South32 has been proposed to manage BHP's non-core assets such as manganese, aluminium, nickel, silver, lead and zinc.

The company will have the majority of its assets in the southern hemisphere with two regional centres in Australia and South Africa, it said in a statement. BHP expects the total one-off costs of the segmentation to be about $738mn. The new entity will simplify BHP's portfolio, which has interests in 41 assets across 13 countries and six continents. BHP Billiton reckons that the spin-off may generate around $100mn/yr in savings, with 90pc made by the end of 2017. Part of the new company's portfolio has Australia Manganese; a 60pc interest in the Groote Eylandt Mining Company (GEMCO) open-cut manganese mine and the Tasmanian Electro Metallurgical Company (TEMCO) manganese alloy plant. GEMCO is located in the Northern Territory and TEMCO is in Tasmania. There is also South Africa Manganese; a 44.4pc interest in the Mamatwan open-cut mine and the Wessels underground mine (collectively known as the Hotazel Mines) and a 60pc stake in the Samancor Manganese Metalloys alloy plant (Metalloys). The Hotazel Mines are near the town of Kuruman, South Africa.

WEEK IN REVIEW: Dollar rise against euro drives metal pricesMetal-Pages 20/03/2015 King dollarAfter a brief dip following the US Federal Reserve statement on Wednesday that highlighted moderated economic activity and slowing export growth, the US dollar regained its rise to 12-year highs against the euro in the second half of this week. A bullish UK budget statement - the last to be delivered by the coalition government before the May general election - promised some support to the automotive sector and northern industries and tax relief for small and medium-sized enterprises for their R&D and to encourage them to expand their export markets. But, while cautiously welcomed by business in Europe’s fastest growing economy, it was not enough to sway the public or forex traders. The Bank of England dampened expectations of a rise in interest rate, which has been sitting at 0.5pc for the past six years, and comments from its chief economist suggested the BoE is even mulling an interest rate cut. All this combined to help sink the sterling to a five-year low against the US dollar. This soggy state of affairs in European currency markets does nothing to help metal prices, most of which are dollar-denominated. With few exceptions - such as molybdenum picking up from a very low base - spot metal prices took a further dive this week. The strong dollar is also a factor in metal markets that rely for a significant part of their supply on Russia, such as chromium and ferro-titanium. The weak rouble that depressed earnings at Russian steelmakers is also a factor in driving ferro-titanium prices in Europe to their lowest level since the start of 2010 and aluminothermic chromium to a level not seen since September 2013. The rouble’s woes are also hitting Russia’s automotive industry and market, having severely dented Russian consumers' buying power. After seeing its sales in the country fall 38pc last month, US carmaker General Motors announced this week that it is closing its factory in St Petersburg and will end local production of Chevrolet cars through its joint venture with Russian automaker GAZ. GM will also wind down sales of the German-made Opel brand in Russia by the end of this year, taking a $600mn hit as a result. South Korean carmaker Ssangyong Motors, which had

boasted Russia as its largest market in 2013 but saw sales to Russia fall 41pc last year is also suspending its car sales to the country. While others may step into the breach, the worrying trend is that GM has failed to benefit from lower input costs in Russia as it said local content of its cars has been relatively low. Meanwhile Russia’s own car production is falling - the country produced 215,000 cars in January and February 2015, with production flat from month to month but down 20.6pc on the same period last year.

The European manganese flake market has dropped in the past week due to weak domestic demand from steel mills and cheaper offer prices from China, where domestic steel demand is falling this year due to oversupply, industry sources said. The European spot market is currently at an eight-year low.

In Europe, other grades of manganese, such as briquettes, are selling for around a $125 premium to the flake market, with lumps a little more expensive. With only a few customers in Europe for lump, manganese flake is converted to manganese lump to order. US silico-manganese spot prices have been cautiously stable this month, although weak steel markets, particularly in rebars, pipe and tubes, is undermining raw materials markets and that pattern is expected to hold in the next couple of months at least.

INTERVIEW: Longer term upside for commodity prices as development pipeline slowsMetal-Pages 23/03/2015

There is longer term upside for the prices of several commodities on the basis of a supply gap opening up due to resource companies cutting back sharply on exploration and development capital expenditure across the globe.

This is the view of Alan McKenzie, general manager of technology at Mintek, South Africa’s state-owned minerals and metals research facility, which regularly carries out test work for producers of rare earths, base metals and precious metals.

“It can take 10 to 15 years – and sometimes even longer - between finding a new resource and producing commercially from it,” he told Metal-Pages in an interview.

“Large mining companies are not investing and committing capital to the long term. They have become increasingly short term focused with a big emphasis on paying dividends to shareholders.”

Importantly, McKenzie believes that this lack of investment in the future will lead to a dearth of new Tier 1 deposits in several commodities in years to come.

Stressing the long development cycles of the resources sector, he also pointed to the long lead times associated with the adoption of new technologies.

“There are technologies being accepted and utilised now that we developed up to 20 years ago. They go through a laboratory phase and a pilot phase and then there’s decision-making with regard to design, permitting, licensing, plant building and commissioning – it’s a very slow process,” explained McKenzie.“If someone comes up with a new deposit today, it often takes at least ten years before it is mined. Only the nuclear industry has longer development cycles.”

Illustrating the long lead times in the industry, McKenzie said global resource giant Glencore only recently started ramping up DC furnaces at its Koniambo ferro-nickel operation in New Caledonia, which are based on technology developed 15 years ago by Mintek, when the project was owned by Falconbridge.

“One can go back even further on this project as Mintek did pilot test work on nickel laterite deposits from this site around 20 years ago,” he said, further highlighting the time it can take for projects to bear fruit and technology to be adopted and commissioned.

While several mining companies are focusing on brownfields development, there has been a sharp fall-off in greenfields exploration, a factor that could easily effect supply and demand balances in various commodities over the next couple of decades or so.

Most big mining groups which have announced production and financial results this year cut back significantly on exploration and development capital expenditure in 2014, and are further pruning their outlays in 2015 and 2016.

What Does South32 Mean for the Nickel and Manganese Markets?Roskill 19/03/2015 In August 2014, BHP Billiton (BHPB) announced that it intended to demerge its aluminium, coal, manganese, nickel and silver assets into a new, independent global mining and metals company. In December, it was announced that the proposed company will be branded "South32", to reflect the fact that its major operations will be in the southern hemisphere, in Australia and South Africa. This week saw the publication of a demerger prospectus which provided more detail about the spin-off:

- South32 will be a top-10 global mining company headquartered in Perth, Western Australia, and will produce 10 commodities across five countries

- After the demerger, which will cost an estimated US$738M, the company will have a gross asset value of US$26.7Bn

- South32's portfolio of assets made a pre-tax profit of US$422M in 2014 on revenues of US$10.4Bn

- The company will begin life with a US$1.5Bn credit facility provided by a syndicate of banks to ensure that it has adequate liquidity

- BHPB has loaded South32 with less debt than expected, US$674M- Shareholders will vote on the demerger in May

The creation of South32 has the potential to significantly impact the manganese and nickel markets:

With regard to nickel, BHPB is only partially divesting its portfolio in this commodity. South32's portfolio will include the Cerro Matoso operation in Colombia, but not BHPB's Nickel West operations in Australia. The Cerro Matoso operation has a nominal capacity of around 50kt but actual production has exceeded this amount in recent years. It produces ferro-nickel granules containing 45% Ni. The operation is known to be one of the most cost-effective laterite mining operations in the world, as ore in the deposit is found in a comparatively small area of thick layers, making it easy to mine. Abundant hydroelectric power and local natural gas have contributed to low energy costs.

South32 will, therefore, inherit the more stable side of its nickel business. BHPB was seeking to divest its Nickel West operations in 2014, but the division was valued at only A$300-$800M by analysts, owing to the division's environmental liabilities. In November, despite interest from Jinchuan and Glencore, BHPB announced that it had failed to secure the sale of the business "on an acceptable basis". Although the Nickel West operations are slated to remain part of BHPB's non-core portfolio, with further job cuts announced inFebruary 2015, the future of its operations remains uncertain.

With regard to manganese, South32 will take control of all BHPB's assets and, therefore, be the largest manganese ore producer in the world. As of 2014, BHP Billiton accounted for 22% of mine production. In Australia, BHPB is a producer of manganese ores through Groote Eylandt Mining Company, and manganese alloys through Tasmanian Electro Metallurgical Company. In South Africa, BHPB controls two manganese ore mines (Mamatwan and Wessels) and one large manganese alloy smelter (Metalloys).

The most significant outcome of the demerger in the context of the manganese market is likely to be the importance of South32's manganese assets to its business. In terms of EBIT, BHPB's aluminium, nickel and manganese business represented only 1% in 2014, compared with 53% for its iron ore business. Manganese will, therefore, be a much more significant part of South32's revenue and profit base. This is likely to prompt new, strategic approaches from the world's biggest manganese miner.

South32 could be interestingIntelligentInvestor 19/03/2015

Far from being the dregs of its famous parent, proposed BHP spinoff South32 looks rather promising. BHP Billiton (ASX:BHP) released more details of its proposed spin-off, dubbed South32, and from early indications it looks like an interesting idea.

Last year BHP made 96% of its profits from just four commodity groups and 19 mines. Hiving off its smaller, less profitable assets into a new business means that management can concentrate on its largest most profitable mines.

The new BHP will produce iron ore, petroleum, copper and metallurgical coal. Its remaining mines will be colossal assets where BHP has control of huge resource rich basins, like Pilbara in WA or the Bowen Basin in QLD. Each asset boasts decades of reserves and stable, generous returns.

The break-up of BHP is a significant event in the mining industry. It signals the end of the diversified mining model and, perhaps the beginning of a new profit driven strategy. This is a welcome change from the past 15 years when success was measured by size and output rather than profit and returns to shareholders.

South32, which will include manganese, silver, base metals, aluminum, alumina and coal, will be a significant business, about $12bn worth, and it is more than just waste from its parent.

It will contain some genuinely high quality mines. Worsley alumina is one of the lowest cost alumina producers in the world; the Cannington mine is the world’s largest producer of silver and a significant lead and zince mine; the Australian manganese business is the largest, lowest cost producer of manganese anywhere. These are fine assets that generate high returns.

There are also, however, some lousy assets. The South African coal and magnesium alloy business are low quality and could be divestment options. Imbued with just $700m in debt, South32 will carry little debt but is more likely to be an acquisition target than an acquirer itself.

South32’s mines have been neglected for years. Its reserves base has shrunk from a lack of drilling and BHP has skimped on capital expenditure as it focused cash and attention on is trophy assets.

By lavishing attention on neglected mines, the new miner should improve profitability and rates of return but it will also have to plough more cash into exploration and capital expenditure than BHP has done in the recent past. It will need to deploy its balance sheet on its own mines.

Management has promised to do all this as well as pay generous dividends. It’s unlikely to be able to do both. Despite these concerns the proposed split is an excellent idea and we’ll be looking at it closely once prices are announced.

Manganese ore prices collapse in response to surplus supplyMetal Bulletin Research 19/03/2015

We were wise to be wary of the improvement in manganese ore prices noted last week. After two consecutive weekly pricing gains, manganese ore prices collapsed over the past week. Prices now stand at their lowest levels since mid-2009.

We suspect manganese ore prices have further to fall. The continued strengthening value of the US dollar versus key commodity currencies, including the South African rand and the Australian dollar, will enable suppliers to reduce prices further in an attempt to spur purchasing and help clear over-supply, particularly in South Africa. Chinese manganese ore stocks continue to climb, and remain well above desirable levels. With Chinese crude steel production declining thus far in 2015, it is unsurprising to see manganese ore inventories building and prices declining. Chinese crude steel output fell 4.7% year-on-year in January, and we expect that February data will also show declining output.

Manganese alloy prices are also succumbing to currency factors and over-supply. The US Commerce Department and the US International Trade Commission (ITC) have both initiated anti-dumping duty investigations into silico-manganese imports from Australia following a complaint by domestic producer Felman Production. The ITC’s preliminary determination is due on or before April 6, with the Commerce Department scheduled to make a preliminary determination by July 29. With the US market now under threat, we understand Australian silico-manganese shipments are increasingly being diverted to Asian markets.

Increased flows of Australian silico-manganese to Asia are occurring just as Indian silico-manganese suppliers are diverting material to Asia as well, given the anti-dumping investigation underway in Europe against imports of Indian silico-manganese. Meanwhile, the weakening of local currencies versus the US dollar is enabling Indian silico-manganese producers to cut prices in order to move material, with the losses less severe in local currency terms.

MBR outlook We understand there are signs emerging that we are near the floor for global steel prices. While we do not expect a rapid upturn in global steel prices, or an impressive recovery in ferro-alloy prices on the back of steel price recovery, the emergence of a floor in steel prices would still be a welcome event for the ferro-alloys sector. When pricing downturns become entrenched, uncertainty as to future pricing levels prompts buyers to pull back from the market and delay purchases. If industry participants begin to perceive that prices are bottoming out, we will see renewed purchasing throughout the supply chain that will gradually absorb excess steel and raw material supply, boosting consumption, and ultimately lending upward support to prices. The exact timing of this phenomenon remains unclear, but at least we can now have some confidence that it is approaching.

STEEL NEWS back to index

US steel sector is under siege, executives tell CongressMetal Bulletin 26/03/2015

The US steel industry is facing a flood of unfairly traded imports, crumbling infrastructure and a lack of relevant skills, according to several senior executives in the sector.

They were speaking at the US Congressional Steel Caucus "State of Steel" hearing in Washington on Thursday March 26.

The country’s steelmakers need to bleed before trade enforcement kicks in, something that must be addressed quickly, according to US Steel president and ceo Mario Longhi.

"When Congress incorporated the injury standard, it did not intend for companies or workers to suffer severe, persistent harm before they can seek relief," Longhi said.

Historic discourse on the injury standard in Congress "made abundantly clear that it would be perverse to insist that an American company experience grievous harm before becoming entitled to the full protection of its nation’s laws", he said.

Other factors besides operating margins – which has become the dominant measure of injury – should be addressed in an injury determination, including "suppressive effects on cash flow, production, net income, employment, research and development, and investment in new technologies and growth", Longhi said.

Current import flows are in serious danger of leading to steel mill closures, he warned.

"The last time we were at these [import] levels, nearly half of America’s steel companies disappeared," Longhi said.

US Steel has already idled several operations and is set to lay off thousands of workers because of declining steel market conditions that it has blamed partly on imports.

A recent trade case involving Turkish rebar imports failed to provide adequate relief for domestic steelmakers, according to John Ferriola, chairman, president and ceo of Nucor, adding that Turkish imports had increased significantly since that case.

One key issue was energy subsidies for Turkish producers, which the US Department of Commerce ultimately found to be negligible.

"How could energy subsidies have such little value? Energy costs run into the hundreds of millions of dollars annually for a company like ours," Ferriola said.

Steel executives also made note of the Trade Promotion Authority (TPA) debate about to begin in Congress, warning that increased powers for the US president to enter into trade agreements should come with caveats – citing currency manipulation and state-owned enterprises, for example.

Infrastructure also was a key concern during the hearing.

"American companies are placed at a disadvantage in increasingly global markets as they compete with foreign producers which operate in nations that fund their transportation infrastructures at much greater rates, as is true of most of our major trading partners," Tracy Porter, president of Commercial Metals’ Americas division and vice chairman of the Steel Manufacturers Assn (SMA), said.

"Infrastructure investment has the ability both to provide an immediate boost to employment levels and to make the US more competitive in the decades ahead," he added.

A lack of skilled workers was also an imminent problem, with maths and science skills in short supply.

"Our community college and university partners have a difficult time recruiting students with the required maths and science skills," Michael Rippey, chairman of ArcelorMittal USA, said during the hearing.

Meanwhile, he added, US steelmakers’ competitors in Europe and Asia "are investing in programmes to develop engineering talent and a workforce that will enable them to compete globally".

Q1 performance has been poor, though an uptick is expected: Stainless Steel Highlights

Metal Bulletin Research 26/03/2015

Normally a time of year for high activity in the global stainless steel markets, the first quarter has been relatively quiet. Throughout most global markets, large buyers are running down stocks that were accumulated early last year when nickel prices surged upwards. With nickel prices now bouncing along what we consider to be close to bottom, and thus stainless steel transaction prices doing likewise, there is little impetus for buying at present given low price inflation, or even outright deflation. This may all begin to change soon, however, with the convergence of a number of factors, including rising nickel prices, capacity cutbacks and increased trade action.

The US stainless steel market, while the strongest globally, has gotten off to a slower-than-expected start this year and its growth continued to be sluggish in February. This is not surprising amid tumbling raw material surcharges, and therefore stainless steel transaction prices, especially at a time when supply appears to be outstripping demand as most distributors look to work down their inventories. Not only are domestic mill lead times continuing to shorten, but depot stocks are available for the first time in many months. On the plus side, imports appear to be starting to ease off despite certain aggressively-priced offers and many stainless consuming end markets continue to gradually improve. This makes MBR optimistic that market conditions will improve as the year progresses, especially if the nickel market tightens as many predict.

In China, in spite of the gloom thus far, market participants remain confident that prices have little farther to fall. This is somewhat surprising to MBR given the number of anti-dumping cases on CR coil which threaten to impact exports, especially to third countries in the EU. But the arguments we hear from the market relate to an expected revival in regional demand, mainly for seasonal reasons and a partially related revival in nickel prices. While demand should improve, the impact on prices could be muted should too much stock have been accumulated through February. Volumes had retreated just before Chinese New Year and if they have remained low then prices may well outperform our modest expectations. During the past month, the downward trend in austenitic prices has continued in line with our expectations. Whereas carbon steel pricing has picked up since the holidays, in spite of continued malaise in iron ore, stainless prices are more faithfully following the movements in their key raw materials.

As we detailed last month, however, there is little positive to note for stainless consumption this year throughout Asia, and so the pricing dynamics do not merely reflect raw material patterns. Again in contrast to carbon steel where Chinese exports surged to a new record and up more than 50% year-on-year in January, Chinese stainless exports are still struggling to revive. In fact year-on-year, volumes actually fell in January according to the latest customs statistics and though the product breakdowns are not available, we would expect CR coil to have been most affected.

Looking at Europe, at the end of this month, the European Commission is set to deliver its preliminary ruling in its anti-dumping investigation against CR flat products from China and Taiwan. These imports have surged over recent years – practically doubling during 2014 when compared to 2013 – and so a duty would not surprise. Certainly it should not be too difficult to prove injury to Europe’s stainless steel industry, with 2013 being one of the worst on record in terms of financial performance, in turn leading to a number of meltshop closures. That said, 2014 actually saw an upturn in financial performance for the sector, indicative really of how the fortunes of the industry in fact depend much more on nickel price movements than import competition, so duties are by no means a foregone conclusion.

Global crude steel output growth a mere 0.6% in February: Crude Steel HighlightsMetal Bulletin Research 26/03/2015

The anticipated seasonal rise in demand has yet to lift the steel industry in 2015. Positive economic information from the USA and most of Europe, however, indicates that steel demand will increase as 2015 progresses. The fundamental issue of over-supply remains

and until this is addressed will remain a defining factor within the steel industry for the foreseeable future.

In the first two months of 2015 crude steel output has not been supported by global demand, however customary seasonal drivers, which typically kick on from March, are yet to have a prominent impact. According to the World Steel Association’s (WSA) figures, crude steel production fell 1.3% year-on-year through February. Chinese production recovered in February, however, following greater losses in global output in January driven by Chinese cutbacks. Clearly any cutbacks taking place are hardly permanent for they also revealed that the crude steel capacity utilisation rates in February 2015 were 1.7% lower year-on-year. This decline is, however, consistent with our own observations, and is particularly pronounced in China as imposed environmental regulations are causing mills to remain under maintenance but not causing them to shut down permanently, or at least not so quickly as newer,

larger capacity taking its place. The Chinese government is trying to curtail over-capacity, especially in the largest producing regions. Hebei’s provincial government has announced plans to reduce its steelmaking capacity by phasing out operations that are smaller than 450 cubic metres, while the steelmaking cutbacks targeted by Beijing amount to another 40Mt through the next three years, according to MBR calculations.

Chinese crude steel output is declining with the combined total for the first two months of 2015 reaching 130.5Mt, representing a 1.5% decline year-on-year. Chinese crude steel output reportedly fell by just 0.7% between January and February 2015. The implication of the WSA’s report is that Chinese crude steel output in February was only marginally lower than in January 2015. The fall in output is unlikely to be so marginal, as we know that environmental regulations began to pinch steel mills in February and this was combined with a lower output associated with the Chinese lunar festival.

In addition, the expected lift in demand that inherently follows the Chinese lunar festival has not manifested itself as was seen last year, when crude steel output in China increased by 12.1% between February and March. Concerns are mounting, as China’s economy grew at the weakest pace since 1990 in 2014 and this trend looks set to continue into 2015, characterised by weak construction demand and industrial over-capacity.

US steelmakers have cut output in order to try to realign demand with excess supply and halt the downward trend of finished steel product prices. Average US steel mill operating rates fell below 70% during March, further undermining raw materials demand. US domestic HRC prices have fallen by 19% between January and March 2015. US crude steel production fell 13.75% between January and February 2015, according to the WSA, representing a 4.1% decrease year-on-year for the first two months of 2015. US steel producers are adjusting their output, looking to improve operational efficiency against the backdrop of falling prices and increased competition.

In Q2 2015, US Steel will begin the construction of a $230m EAF facility at the Fairfield Works in Alabama to replace the existing blast furnace. A coupling facility will be added at an additional cost of $47.5 m. This move is aimed at providing greater operating flexibility.

EU anti-dumping duty hits China, Taiwan stainlessMetal-Pages 25/03/2015

The European Commission will impose a provisional anti-dumping duty on imports of stainless cold-rolled flat steel products from China and Taiwan.

A 25pc duty has been applied to Chinese companies Baosteel Stainless Steel and Ningbo Baoxin Stainless Steel, and a 24.3pc rate on Shanxi Taigang Stainless Steel and Tianjin Tisco & TPCO Stainless Steel. Taiwan's Chia Far Industrial Factory receives a 12pc duty,

while Tang Eng Iron Works and Yieh United Steel's imports will incur a 10.9pc duty, the commission said today.

The duties come into force tomorrow. The commission initiated an anti-dumping investigation following a complaint lodged on 13 May, 2014 by European steel association Eurofer.

The EU imported 143,420t of stainless steel from China in 2013, up by 153pc from 2010. Imports from Taiwan rose by 32pc to 169,097t in 2013 from 127,664t in 2010. Chinese and Taiwanese stainless steel market share in the EU grew from 5.8pc in 2010 to 9.5pc in 2013.

"This surge of imports bears no relation to the evolution of EU consumption. The root of the problem resides in the huge capacities that have been built in China. They largely exceed local consumption growth and cannot be absorbed domestically. Taiwan has also a structural overcapacity problem," Eurofer director general Axel Eggert said.

ArcelorMittal sees no more steel cuts in Europe this yearMetal-Pages 23/03/2015 No more cutsLuxembourg-based steelmaker ArcelorMittal, the biggest steel producer in the world, has confirmed it is not planning to cut capacity further in Europe this year despite facing the likely prospect of cheaper imports. The company has already adjusted its production capacity in Europe. The company said 19 of its 25 European furnaces are currently in operation, with only potential cuts in production due to regular maintenance schedules and possible repairs, a spokesman from Germany told Metal-Pages. Steelmakers in the northern hemisphere typically shut for maintenance and repairs for a couple of weeks in July and/or August. ArcelorMittal announced recently it will spend €88mn to modernise four German plants this year. The plants make a combined total of some 7mn t/yr of liquid steel, accounting for about a fifth of the group's total annual European liquid steel output. ArcelorMittal shut down blast furnaces in Belgium and idled others in France and Germany after the 2008 financial crisis, since when steel demand has not yet fully recovered.

Global steel output rises 0.6pc in FebruaryMetal-Pages 20/03/2015

World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was up 0.6pc in February against the same month last year at 128mn t. Production was 3.8pc lower than for January.

China’s output was estimated at 65mn t or 4.7pc higher against February 2014. Elsewhere in Asia, Japan produced 8.4mn t, a decrease of 0.2pc, while South Korea's output was down 4.4pc at 5.1mn t.In the European Union, Germany produced 3.5mn t of crude steel in February - a 1.6pc decline, while Italy's output fell 9.7pc to 2mn t. France’s crude steel production was 1.3mn t - down by 1.6pc compared with February 2014. Spain's producers churned out 1.1mn t of crude steel - a 4.4pc reduction. Further east, Turkey’s production fell 12.2pc on February 2014 to 2.4mn t.

Last month, Russia produced 5.7mn t of crude steel, up by 5.6pc over February 2014. Neighbouring Ukraine's output came in at 1.6mn t - down 33.2pc on the corresponding month a year earlier.

The US produced 6.3mn t, a drop of 7.9pc, while Brazil’s production was up 2.3pc at 2.7mn t.

Crude steel capacity utilisation for the 65 countries in February was 73.4pc. The figure was 1.7 percentage points lower than for February 2014. Compared with January, it was 3.8 percentage points lower.

Worldsteel figures are monitored closely by ferro-alloys producers whose own production may be directly affected by global steel demand.

UK budget promises boost for car sector, SMEs, northern industryMetal-Pages 19/03/2015

The UK annual budget, delivered on Wednesday, included measures to support the national automotive industry and small and medium sized manufacturers, seen as key to economic growth.

Among initiative announced is an investment of £100mn ($147.1mn) in development of driverless cars and tax relief for small and medium sized enterprises (SMEs) for research and development including development of new export markets.

The £100mn investment into developing driverless cars will be warmly received by the automotive industry, said John Leech, head of automotive at KPMG UK. "The UK is well placed to develop driverless cars compared to other EU countries," he explained. "Pilots of the technology are already underway in Greenwich, Bristol, Milton Keynes and Coventry and we have Europe’s finest independent testing facilities for this technology at MIRA. Driverless cars will reduce congestion and improve safety and this investment will help to unlock these benefits in the next decade.”

The government is also seeking to encourage a switch to ultra-low emission vehicles by raising company car tax for such vehicles more slowly than previously planned, UK Chancellor George Osborne said, other rates would increase by 3pc in 2019-2020.

Hybrid and electric vehicles are currently the UK’s fastest growing car market and demand for new cars overall is being driven not by individual drivers but by expansion and upgrades of company fleets – there was a 19.9pc growth in new car registrations for businesses in the UK in February, according to the Society of Motor Manufacturers and Traders.

The government also committed to implementing a package of measures to help small businesses access tax credits for research and development. This includes producing new guidance to R&D tax relief aimed at smaller firms and setting out a roadmap for further improvements over the next two years.The government has issued clarifications on what expenses qualify for R&D tax relief – from 1 April 2015 the cost of materials incorporated into products that are sold will not be eligible. The R&D tax credit rate will increase above the line credit from 10pc to 11pc and the rate of the SME scheme from 225pc to 230pc, both from 1 April 2015.

PricewaterhouseCoopers (PwC) today gave positive feedback on the measures included in the budget to support the UK industry. “The commitment to making R&D credits effective for small businesses and clarifying the scope of what qualifies is particularly welcome for the aerospace, defence and security sectors where R&D is such a significant part of what they do,” said Justin O’Hagan, tax partner at PwC.Among other measures, the UK government announced investment of £140mn in world-class research on the infrastructure and cities of the future, and £40mn in research into what is known as the Internet of Things – technology to enable electronic devices, from cars to television sets to household appliances, to communicate with each other.

Among UK strategies is support to industrial developments in the northern regions, the initiative known as Northern Powerhouse, which among other measures will see £11mn investment in innovation clusters of “tech hubs” in Manchester, Leeds and Sheffield. Another £1mn will go to the Centre for Process Innovation for the North East’s chemical sector.

The strategy will see devolution of powers to Manchester and Sheffield, investment in northern transport infrastructure and £3.5mn of funding in 2015-16 to deliver a series of overseas trade and investment missions in key sectors, focusing on the north of England. Economic growth in the traditionally industrial north, home to most of its metals and chemical industries, is consistently outpacing the south of the country.

“The latest data shows that output per head in the North West, North East, West Midlands and Wales all grew faster than London in 2013. In addition, in the year to the end of 2014, employment in the North East, North West and the East Midlands all grew faster than in London,” the budget report stated.

The UK government will also provide an additional £7.5mn of funding in 2015-16 to UK Trade and Investment for its work to maximise trade and investment links with China. This near-double increase in funding will focus on areas including advanced manufacture.

China is a key market for the UK as exporters faced with weaker markets in the EU, UK’s largest trade partner, have turned to non-European markets. Since the start of 2010, the UK volume of goods exports to non-EU countries increased by 24pc and the country’s trade deficit now stands at £4.4bn, the lowest since October 2000.

Other measures in the budget include lower taxes for the oil and gas industry, to support investment in North Sea oil production, an important consumer of titanium and other corrosion resistant alloys for drilling and infrastructure. The measures include a cut in petroleum revenue tax from 50pc to 35pc to support production from older oil fields. "The fall in the oil price presents a pressing danger to the future of our North Sea industry - unless we take bold and immediate action," UK chancellor George Osborne said.

The UK’s economic growth at 2.6pc in 2014, as confirmed today by the Office for Budget Responsibility (OBR), outpaced other major economies. This was 50pc faster than Germany, three times faster than the eurozone and seven times faster than France, the chancellor said.

OBR projects UK growth at 2.5pc in 2015. “Within just 15 years we have the potential to overtake Germany and have the largest economy in Europe,” Osborne stated in his budget speech today.

Brazil steel production sees uptick in FebruaryMetal-Pages 19/03/2015

Brazil's steel production increased 2.3pc in February against the same month last year to 2.7mn t, steel industry trade body IABr reports.

Rolled steel output was 4.3pc higher against February 2014 at 2.1mn t.

Despite tough trading conditions on international markets, export shipments increased 22.7pc to 1.8mn t, while the value of those exports rose 6.1pc to $1.1bn.

Steel imports have continued to increase and were up 24pc against February last year at 315,000t, continuing to cause headaches for local producers.

Another concern is domestic consumption, which was down 10.8pc against February 2014 to 1.8mn t, and 7.4pc lower in the opening two months of the year at 3.8mn t.

US sets preliminary duties on Turkish steel imports

Metal-Pages 18/03/2015 Ferro-alloys benefit?The US this week set preliminary duties on welded line pipe from Turkey, which has been unfairly subsidising Turkish production, according to a US investigation. The move follows production cuts and shutdowns in the US steel sector, which in turn has dragged on domestic raw materials prices such as ferro-alloys. The US Department of Commerce said anti-subsidy duties on the pipe, used for oil or gas pipelines, will range between 3.76pc and 8.85p. South Korean imports, which were also part of the investigation, were spared such duties as they were below the threshold, a Commerce statement said. A parallel investigation will persist to see if imports were sold at below production cost prices, which may result in duties on products imported from South Korea's Dongbu Steel, Husteel, Korea Cast Iron Pipe Industry and SamKang, the statement said. Last year, imports of welded line pipe from South Korea and Turkey were valued at some $544mn and $95mn, respectively. Commerce has aligned those CVD (countervailing duties investigations) with the concurrent anti-dumping duty investigations of welded line pipe from Turkey and South Korea, and is scheduled to announce its final determinations around 29 July this year, unless the statutory deadline is extended. The ITC is currently scheduled to make its final injury determinations in September this year.

Steel sector strugglingThe US steel sector has been facing fierce competition from low-cost steel-making countries such as China, South Korea and Turkey, and margins are being squeezed. Steel mills in the US are operating at below 70pc production capacity on average, according to the latest domestic industry data. That is a level last seen in 2009 when US steel mills slashed production after the economic crash in the West in 2008 prompted a slump in Western demand. So far this year there has been steel production cuts and job losses at major producers in the US such as ArcelorMittal and US Steel. There have also been production cuts at tubular steel makers such as Vallourec, which makes products for the oil and gas sectors that are feeling the impact of the slump in crude oil prices. US steel mills have also seen their raw materials costs increase this year due to the strengthening dollar, which has also hit steel exports while attracting more steel and ferro-alloys imports. Last year Port Tampa Bay received more than 245,000t of steel products such as coils, rebar and pipes, compared with barely 80,000t in 2011. US ferro-alloys prices have been weakening this year and are looking vulnerable to further losses in the coming months, with the strengthening dollar and a slowing Chinese economy potentially knocking raw materials consumption further in the steel sector.

Salzgitter subsidiary wins 10,000t offshore wind project steel orderMetal-Pages 18/03/2015

Salzgitter subsidiary Ilsenburger Grobblech (ILG) has received an order for around 10,000t of heavy plate for jackets for the Wikinger offshore wind project in the Baltic Sea.

The jackets are a special type of foundation for offshore plants, consisting of a truss construction made of steel pipes, making them especially suitable for use in deep water.

Situated around 30km (19 miles) off the coast of the island of Rügen, the Wikinger wind park is the first offshore wind energy project in Germany for Iberdrola Renovables, a global power plant planner and operator in the field of renewable energies.

The wind industry consumes around 200,000t a year of heavy plate.

ILG supplies around 800,000t of heavy plate in some 350 steel grades worldwide customers and is a leading manufacturer of longitudinally welded steel pipes for the oil, gas and offshore wind industries.

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Manganese prices hit 5-year low in ChinaMetal-Pages 26/03/2015

Chinese manganese prices have continued falling amid thin business on the spot market and lower tender prices offered by POSCO.

POSCO, the largest manganese consumer in South Korea, has issued its tender price for manganese flake with delivery in April.

On the spot market, flake prices have dropped. As new rounds of monthly purchases will begin, stainless steelmakers are likely to continue to press down tender prices in the face of declining stainless steel prices. But a large markdown is not on the horizon as current prices are hitting their lowest level since October 2008.

Prices began to lose ground in the middle of March after Baosteel unveiled its tender prices for March.

More traders are exporting material via illegal routes, with a source reporting that some traders have exported flakes to Europe using illegal routes, while key producers are holding their offers, with no deals concluded yet.

Exporters are required to pay a 17pc domestic value added tax before shipping material overseas. Prices are at least $50 lower than legal business if some percentage of the VAT is evaded.

Chinese selenium dioxide market eases on weak Mn industryMetal-Pages 26/03/2015

The selenium dioxide market in China has eased in the past few days as the manganese industry has been weakening.

Manganese prices have been falling in the past month in line with a sluggish stainless steel sector. The market has shown few signs of stabilising, and producers are likely to depress production costs by cutting prices for raw materials.

New production projects planned last year have been postponed as current prices have left no profit margin for producers. The rate of production capacity is estimated at 30-40pc.

Dioxide producers are rushing to sell material owing to the downbeat outlook.

Prices of selenium 99pc, the key raw material for dioxide, have fallen this week, weighing on the downstream market. Prices for selenium powder 99.9pc have been negatively affected by aggressive offers from overseas suppliers, together with the sluggish Chinese market.

Import prices for 99pc min grade powder are down $2-3/lb compared with last month. Importers are living off deliveries bought before the Chinese New Year holiday (18-24 Feb) and have shown little enthusiasm about building stocks despite prices reaching a multi-year low.

China imported 249,217kg of selenium in the first two months of this year, up 24.82pc compared with 199,667kg in the same period a year earlier, according to official customs data.

European Mn flake market stems losses, but vulnerableMetal-Pages 25/03/2015 Soft outlookThe European manganese flake market has been steady in recent days after dropping close to a low last seen in February 2007. But weak spot demand for raw materials from ferro-alloys and steel producers leaves the manganese flake market vulnerable to further losses. Flake spot prices have been softening this year against weak domestic demand and cheaper offer prices from China, where demand has also been falling. Dealers have reported doing 10t lots at around current spot price levels. In Europe, other grades of manganese, such as briquettes, are selling for around a $125 premium to the flake market, with lumps a little more expensive. With only a few customers in Europe for lump, manganese flake is converted to manganese lump to order. European steelmakers, mostly in Germany, have been buying material this month from China for forward delivery through the next quarter. Weakening ChinaChinese domestic flake spot prices have lost RMB50/t in recent days amid plentiful availability against weak demand. Chinese producers have failed to hold their offer prices amid poor buying interest and have cut spot material. Stainless steelmakers are likely to cut their manganese intake prices in the coming days against weaker steel prices. Chinese flake prices are at a 12-month low. The latest drop in Chinese prices started a couple of weeks ago when the biggest consumer in the country, steel major Baosteel, issued its tender prices for its needs through the month.

Anticipation of price fall of manganese metal in China grows - TEXTEX Report 25/03/2015 TEX reported that the downward pressure on the price of electrolytic manganese metal in the Chinese domestic market has again become strong. This is because the stainless steel mills in China has entered on the adjustment in production owing to slumping prices of 200 series stainless steel, which leads to anticipation of decreased consumption of manganese metal.

At the present moment, the main price meant for domestic consumption is down by CNY 200 from the end of February, but the present price has stopped declining for a period of time. The supply volume to the market tends to increase but it has become a power of resistance that major producers dislike a price cut and the recovery in production is delayed in the southern area.

However, the contract price is sporadically seen, and many of market participants predict the price will be down further if the increased supply volume strengthens the price downward pressure. In spite of the price remaining in the long term doldrums, the producers' operating rates were not down much from early March, whereas the oversupply in the market is thought to become enlarged due to decreased consumption by the stainless steel mills.

The demand for export is weak, and the trading is thin because most of shippers refrain from buying due to anticipation of a price fall and stay clear of a high price.

For a reference, the application of a comparatively high electricity rate for a low-water season is anticipated to be over in the southern area within March, and it will be a likely case that the resumption of producers' operation will get into full swing and the supply volume will be up, which leads to a drastic price cut.

Manganese prices in China edge down amid thin businessMetal-Pages 20/03/2015

Chinese manganese prices have edged down RMB50/t in the past few days amid thin purchases in an oversupplied market.

Although most producers were trying to hold higher prices due to thin profit margins last week, slow business dampened their confidence.

Stainless steelmakers are likely to depress manganese procurement prices for its new purchases in the next few days in the face of declining prices for stainless steel. This is expected to push spot prices lower. But a large markdown is not on the horizon as current prices are hitting a low last seen in the middle of April 2014.

Prices began to lose ground in the middle of March after Baosteel, the largest manganese consumer in China, issued its tender prices for its requirements in March.

The export market remains sluggish, with prices having dropped in line with softening domestic prices. But foreign consumers are still reluctant to place orders, expecting even lower prices in the near future.

China manganese briquette exports up 28.94pc in JanuaryMetal-Pages 20/03/2015

In January, China’s exports of wrought manganese (mostly in the form of briquette) were 4,415t, up 28.94pc from 3,424t in the same month of 2014, according to official customs data.

China's main export destinations in January 2015 were:Destinations Tonnes Y-o-Y change Value US$ Y-o-Y changeUnited States 1,989 0.63pc 4,229,577 -0.55pcIndia 6509 100.00pc 1,404,721 97.53pcSingapore 6009 N/A 461,379 N/ABrazil 4009 -22.78pc 861,770 -24.88pcSouth Korea 360 227.27pc 720,000 227.27pcNetherlands 175 -30.00pc 362,996 -33.95pc

Sweden 133 6.40pc 269,990 -0.20pcRussian Federation 108 N/A 262,440 N/A

European Mn flake market close to less than $2,000/tMetal-Pages 20/03/2015 Brittle pricesThe European manganese flake market has dropped in the past week due to weak domestic demand from steel mills and cheaper offer prices from China, where domestic steel demand is falling this year due to oversupply, industry sources said. Although prices are virtually at a nominal level, industry sources reckon the in-warehouse price may drop further in the near term as already the range is looking a bit rich. In Europe, other grades of manganese, such as briquettes, are selling for around a $125 premium to the flake market, with lumps a little more expensive. With only a few customers in Europe for lump, manganese flake is converted to manganese lump to order. European steelmakers, mostly in Germany, have been buying material this month from China for forward delivery through the next quarter. China exportsChinese export prices for manganese flake 99.7pc are equal to prices assessed on 17 March. Prices softened last week due to weaker domestic prices in China. In January, China exported 39,748t of manganese, with 35,333t of unwrought manganese and 4,415t of wrought manganese, up some 54pc year-on-year. The Chinese manganese export market is seeing slow business amid weak demand from Western countries, while some dealers have increased their exports via illegal routes, such as the border with Vietnam. Exporters are required to pay a 17pc domestic value added tax. Prices are at least $50 below legitimate business. Chinese manganese flake prices have dropped again this month after being unmoved in the first two months of this year.

As margins are being squeezed close to production costs, manganese flake suppliers are reported to be getting more aggressive in trying to find business.

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