HomeGAA in the MediaNewsArchiveManganese alloys see logistics upside pressure in US

 

Platts
By Anthony Poole
15 Jan 2014

Manganese alloys see logistics upside pressure in US

US manganese alloys saw further upside pressure, triggered by an unexpected, large prompt inquiry from a steel mill, market participants said on January 15.

The Platts high-carbon ferromanganese (76% Mn) assessment rose to $1,020-1,040/lt, in-warehouse major US hubs, on January 15, from $1,000-1,010/lt on January 8. The assessment for silicomanganese (65% Mn) rose slightly to 55.50-56.50 cents/lb, also in warehouse, from 55.00-56.00 cents a week ago.

A southern mill was heard in the market looking for 1,000 st of standard-grade, high-carbon ferromanganese with deliveries starting by the end of next week. Several suppliers said the requirement came about because of logistical issues caused by a delayed shipment of imported material.

They said that few traders and producers had such a large volume in the right place for such prompt delivery, which would put upward pressure on prices. "The price is going to go up. There are not a lot of units out there. I think the market is pretty tight and the numbers haven't been that attractive in the States," which had deterred speculative imports, said a producer source.

He added that the market had been dominated by producers in recent years. "The producers are tight [and] traders don't have much," he said.

Another trader agreed the price was likely to go higher and said he was unable to quote against the requirement because he did not have enough material to meet the demand. "I was shocked when I saw the inquiry," the trader said.

"BHP doesn't have it; Eramet doesn't have it, and there aren't many people who do. It's an opportunity for whoever does have it to get a higher price," he said.

A third trader said it was unlikely that a "barge going up the Mississippi River, past the mill concerned, would just be able to stop and unload 1,000 tons next week, which means, in all probability, it's going to come from somebody with ferromanganese in warehouses in Pittsburgh or Chicago and will get trucked down." He said that would mean the buyer would "have to pay up for it."

Offers against the inquiry were due at midday EST on January 15, according to market participants. Various sources said offers were likely to range from $1,020 to $1,080/lt.

Meanwhile, a consumer reported buying three truckloads of high-carbon ferromanganese for February-March delivery at $1,060 delivered and estimated freight was worth about $30/lt.

An integrated steel mill was in the market for about 500 st of silicomanganese for Feb-Mar delivery and offers against the inquiry were heard at the equivalent of around 56-60 cents/lb, in-warehouse Chicago. 

The third trader said ferroalloys generally were seeing upside pressure from various supply side issues, including Felman Production no longer producing silicomanganese, and shipping delays. "There's a confluence of logistical problems on a bunch of different things, whether its nickel or alloys," the trader said.