Stagnant manganese ore market forces Brazilian producers to postpone expansion
2009-03-16 09:06:43 【Print】
PITTSBURGH(Asian Metal) 16 Mar 09 - The manganese ore market in Brazil remains very slow amid constantly weak demand. Many producers have delayed plans to expand production capacity or resume trading.
Brazilian producers indicate the price at USD230-240/t (USD5.2-5.3/mtu) FOB Brazil for 43-44% manganese ore. Brazil is the largest Latin American supplier of manganese ore to China and North America.
Demand from steel smelters in China has been down significantly since Q4 of 2008.
Some mining projects in Brazil have been delayed because of the worldwide economic slowdown. One company with an expected output of 10,000t/m of 40%min manganese ore has delayed the beginning of production from Q1 of 2009 until Q3 or Q4 depending on if the economic situation improves enough for them to find a consistent buyer overseas. The source cited the price at USD200-220/t (USD5-5.25/mtu) FOB Brazil.
The source added that most of the export market in China disappeared at the end of 2008 when many steel mills cut or halted production. China is Brazil’s main destination for manganese ore. In 2008, manganese ore exports from Brazil to China were approximately 583,000 tons.
Another producer of 43-44% manganese ore in Brazil explained that he has been forced to reschedule his plans to open a new manganese ore processing facility. He currently has a production capacity of around 10,000t/m, but is waiting until the market improves before opening a new 15,000t/m plant.
The source explained, “It makes no sense in the current economic climate to make big moves in production. We would just be sitting on the material. We expect in the next few months to open, but the big factor is demand.”
According to the source, since 2009 he has only 43-44%min manganese ore at very small quantities at USD230-240/t (USD5.2-5.3/mtu) FOB Brazil.
A small producer with a capacity around 2,000t/m of 40%min manganese ore in Brazil said that they have not received any inquiries since December of 2008, but said the price now is USD200-215/t (USD5-5.2/mtu) FOB Brazil. The company has since cut all production and is waiting for the market to improve before reentering the market.
The company added that in order to remain profitable, prices would need to return to USD240/t (USD6/mtu) FOB Brazil. According to the source, however, “We don’t expect the economics of the market of manganese ore to work in our favor any time soon. We are focusing on other projects, but will reevaluate if the situation improves.”
