Fastmarkets MB looks back at a year of changes in the ores and alloys markets.
Manganese ore market stability
Manganese ore prices were relatively stable in2018, following two years of unprecedented volatility. This was the first yearsince 2016 that did not end in a sharp rally, resulting in a dull year fortraders, but a lucrative time for producers. The market has been underpinned bystrong demand from China, while
Chinese silico-manganese futures contracts hadfar less influence on the ore market this year,
despite being a key driver of price volatility in 2017.
Manganese meetings
Chinese silico-manganese smelters started holding monthly meetings to discuss ore and alloy prices. Agendas includedestablishing a price ceiling for manganese ore in March and keeping the widermanganese market stable in November. Market participants say the meetings havebeen quite successful in achieving their goals, but sometimes a consensuscollapses shortly after an agreement, or wider market forces limit thesmelters' influence.
Silico-manganese capacity in China ramps up
Silico-manganese capacity in China was boostedby about 120,000 tonnes over 2018 up until November. Smelters have enjoyed highprofit margins and their additional capacity has supported strong manganese oreprices. However the additional capacity, which has now reached 567,600-592,800tonnes, means competition among smelters will intensify. This squeeze on oreconsumers is expected to be passed onto producers, especially if Chinesesilico-manganese production starts to exceed demand. As a result, theadditional alloy smelter capacity will inject additional volatility into theore market.
Chrome lost its shine
After a strong 2017 that piqued investorinterest in the market, chrome prices have dipped to two-year lows amid highore stocks in China and increased ferro-chrome supply competition in Europe.The greatest drop occurred in the
Turkish lumpy chrome ore market, which hit$215-225 per tonne in mid-December, down from $295-310 per tonne at the startof the year.
High carbon ferro-chrome prices in Europe dropped 21% across theyear, largely due to an increase in off-spec Indian material in the market,which sparked fierce competition among sellers for market share.
Glencore marketing changes
Stuart Cutler will retire from his role as head of Glencore'sferro-alloys marketing department at the end of the year, after 25 years at thecompany. Cutler's departure leaves rising stars Jason Kluk and Ruan VanSchalkwyk to run the department as part of
Glencore's new generation of leadership. Kluk and Van Schalkwyk previously held senior trading roles forchrome and manganese respectively.
Ferro-vanadium prices rallied
Consolidating an increase that began in late2017, ferro-vanadium prices achieved an unprecedented rally, before falteringin November. Fastmarkets'
European price quotation for ferro-vanadium was upmore than 90% in mid-December, compared with the beginning of the year. At itsheight in November the price reached $126-128 per kg, compared with $46.50-49.50per kg at the start of the year.
China's molybdenum exports stalled
Molybdenum in China has been in short supply dueto limited domestic availability, environmental inspections and stabledemand from steel mills. Everything produced in China is used in the domesticmarket so the export market is only active when it is profitable for producersto do so. Comparatively higher domestic prices for much of 2018 meanChina's ferro-molybdenum exports have slumped this year. China exported a total of 3,842 tonnes offerro-molybdenum in the first ten months of this year, compared to 6,858 tonnesin the same period last year, according to data collected by Fastmarkets. China's demand for ferro-molybdenum is expectedto be stable in 2019, meaning exports are likely to be similarly lackluster infuture.