Manganese traders waiting for 'full picture' after South32 flags extended GEMCO outage

Traders in the manganese market were apprehensive and awaiting further clarity following South 32's announcement that sales from its Australian manganese mine Groote Eylandt Mining Company (GEMCO) would be suspended until next year following the damage caused by Tropical Cyclone Megan in mid-March.

South32, the world's largest manganese miner, said in its quarterly report April 21 that it would only be able to resume sales of manganese ore in the first quarter of 2025, after Tropical Cyclone Megan severely hit operations at GEMCO, causing widespread flooding and impairing key infrastructure.

With the news that supply of manganese ore from the Australian island could be hit harder than initially expected, most market participants are opting for clarity before making spot purchases.

"We're not sending out offers until we can see the full picture," said one European trader. "We see other companies actually cancelling old offers on [manganese] alloys and not sending out new ones."

This comes as liquidity for some bulk ferroalloys in Europe continues to be low, as demand from end-users is subdued.

"People are sleeping on the information that this will affect supply by a huge amount, and we are seeing the signs of a very interesting phenomenon so the panic will be here soon," the trader continued.

The trader added that he expects steel mills will come to the market for manganese alloys in the next two weeks to cover themselves for Q3 2024.

Platts assessed ferromanganese DDP Northwest Europe at Eur1,130/mt and silicomanganese DDP NWE at Eur1,150/mt April 24, both stable on the week.

South32 has a 60% share in GEMCO, in the Northern Territory of Australia, which produced 2,324,000 mt of high-grade manganese ore in the nine months ending March 2024, according to the company's latest yearly financial report.

"I see some companies taking advantage of the situation and increasing offers to Eur1,280/mt DDP NWE [for silicomanganese], but they are short on stock," another trader added.

"I see the manganese market strengthening, but it's not going crazy at the moment," a UK-based consumer said.

Platts assessed manganese ore 44% Mn CIF China at $4.75/dmtu April 19, up 13% from April 2.