By Karen Ng / March 27, 2018 / www.metalbulletin.com /
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The higher consumption of manganese alloys witnessed globally in 2017 is likely to spur increased production of silico-manganese this year, according to the executive director of the International Manganese Institute (IMnI).
During a panel discussion at the 19th Asian Ferro-Alloys Conference in Hong Kong on Wednesday March 21, Aloys d'Harambure said that global silico-manganese producers were increasing their output in anticipation of higher demand for the material this year.
He cited IMnI data which showed that global demand for manganese alloys rose 7% on an annual basis in 2017.
"About 19.5 million tonnes of manganese alloys was consumed in 2017, up from 17.5 million tonnes in 2016," d'Harambure said.
He also noted that rising demand from major steel-producing nations such as India, Russia and South Korea would continue to drive consumption of these materials. Silico-manganese, along with ferro-manganese, is a key alloying element used in the production of steel.
India's steel production increased 2.03 million tonnes last year, while output in Russia and South Korea rose 136,000 tonnes and 107,000 tonnes respectively, according to IMnI data.
In anticipation of this increased demand, manganese alloy producers across the globe are ramping up their own output.
Asia currently accounts for 77% of global manganese alloy production, but that percentage is likely to grow in the coming years, according to d'Harambure, with China bringing a series of silico-manganese projects on stream in the near term.
General manager of Beijing LY Metals and Mining, Lucy Wang, agreed, telling Metal Bulletin that China's silico-manganese production is expected to rise roughly 1.2 million tonnes in 2018.
New silico-manganese alloy smelters are scheduled to come on stream or have recently commenced operations in areas such as Ningxia, Guizhou, Chongqing and Inner Mongolia, Wang said, identifying Tianyuan Manganese Industry Group's 960,000-tonne-per-year silico-manganese facility in Ningxia as one such project to come online this year.
According to d'Harambure, these new silico-manganese smelters would increase demand for manganese ore and as a result, this increased demand had pushed up manganese ore prices.
"South African producers have benefitted a lot from the rising demand for manganese ore as Tshipi increased its output from 2.3 million tonnes to 3.3 million tonnes in 2017 and total manganese ore exports from South Africa had surged from 27 million tonnes in 2016 to 50 million tonnes in 2017," d'Harambure said.
However, there was opposition to this view.
"The current Chinese domestic
silico-manganese price is too low compared with manganese ore prices and silico-manganese producers are not going to make any profits if prices stay at 7,600 yuan ($1,208) per tonne," a silico-manganese producer told Metal Bulletin.
Metal Bulletin's price quotation for Chinese domestic silico-manganese held at 7,600-8,000 yuan per tonne in Friday's assessment.
Manganese ore prices slipped further on Friday March 23 after consumers in China increasingly avoided buying fresh material and threats to cut alloy supply escalated.
"This might result in consolidation in the silico-manganese market as the smaller plants will be forced to shut down as previously, before the environmental regulations were enforced strictly, silico-manganese used to be produced by many small producers with 40,000-60,000-tonne capacities," he said, adding that many of them had since shut down due to strict enforcement of environmental regulations.