TEX reported that weak demand for the metal continued throughout June without signs of pick up. Instead, the easing of power prices in the south (in Yunnan and in some parts of Guizhou) by applying special rates since early June 2012 during rainy seasons, and also in the northwest (in Gansu and Ningxia) by introducing preferential rates since end June 2012 with Inner Mongolia joining the league a bit later. The easing, however, eventually served as a bargaining factor for the metal's market prices, to make it further down.

Under such an atmosphere in the market, producers have been in mixed reaction, i.e. some simply maintain offer prices, some concede to the bargaining and some decide to recede from production and liquidate inventory.

Price changes in the market for Mn 99.7%, of Hunan origin for domestic users, warehouse basis, tax prepaid, have been in a gradual downtrend, CNY 14,800 per tonne on June 11th 2012, CNY 14,700 to CNY 14,800 per tonne on June 20th 2012, CNY 14,600 to CNY 14,700 per tonne on June 25th 2012, CNY 14,300 to CNY 14,400 per tonne on July 6th 2012 and CNY 14,100 to CNY 14,200 per tonne on July 10th 2012. One good thing in such a gloomy situation is that the number of actual deals is increasing so far in July 2012.

Production of 200 series stainless steel has been still low, forcing the mills to reduce prices of the products in some areas, but it does not seems to have attracted interest from consumers who have not yet recovered appetite. As a result, demand for the manganese metals has stayed low.

The uptrend in manganese ore prices set by BHP Billiton since June 2012 has stopped, as the prices for August 2012 shipments, announced early July 2012, were rolled over from the prices for July 2012 shipments.

As to the ore stocks at quayside of major Chinese ports, the volume has rebounded from the downtrend until recently, i.e. 2.57 million tonnes on June 18th 2012 and 2.755 tonnes on July 6th 2012. The domestic price of the ore has been basically unchanged but it could start declining, some market sources say, when the ore stocks exceed 3 million tonnes. In other words, the ore price will stay unchanged at the current level unless the ore inventory increases to a bit higher level.

Source - TEX Report Limited

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