On May 13, the main manganese silicon futures contract rose more than 6%, closing at 9112 yuan / ton, due to the previous Australian manganese mine infrastructure was damaged by bad weather, in just one month, the price of manganese silicon rose by more than 45%, so many futures traders in the market called it "fierce ghost".
Australia's manganese ore shipments have decreased, and manganese silicon has become a "fierce ghost"
According to a previous report by China Securities Construction Investment Futures, a strong tropical cyclone appeared in Australia in mid-March, affecting the production base of South32, the world's major manganese ore producer, in Australia, and causing serious damage to the port terminal and the infrastructure connecting the mine, causing a severe impact on production and shipment. This event is difficult to ignore in terms of magnitude and time scale. In 2023, the annual manganese ore production of South32's production base in Australia will be 3.545 million tons, while the total global manganese ore output according to USGS statistics will be 20 million tons, accounting for 17.7% of the global output according to this caliber, and the impact is large. According to the mine's official statement, the relevant infrastructure will not fully return to normal until the first quarter of 2025, and the impact time will run through the entire 2409 contract, and even extend until the end of the delivery of the 2501 contract. In such a long time frame, the manganese ore supply has declined by more than 10%, which is expected to have a serious impact on manganese ore prices. Of course, South32 also said it would evaluate other transport options to build up some of the ore export capacity before the terminal is rehabilitated.
Relevant statistics show that the total global manganese ore output last year was 20 million tons, and according to this caliber, the manganese ore base output of South32 accounted for 17.7% of the global output, which has a large impact. Judging from the official statement of the mine, the relevant infrastructure will not be able to fully return to normal until the first quarter of 2025, and the main domestic manganese and silicon futures 2409 contract will continue to be affected, and even affect the forward 2501 contract. A 10% drop in manganese ore supply over such a long time frame is expected to have a profound impact on manganese ore prices. In addition, before the above-mentioned emergencies, the mainland imported about 470,000 tons of manganese ore from Australia every month, and the import volume fell to about 350,000 tons in March, and the monthly import volume fell to 120,000 tons.
Manganese ore has a high degree of dependence on foreign countries
The raw materials for manganese silicon production mainly include manganese ore, coke and electricity, generally speaking, manganese ore accounts for 50%, coke accounts for 15%, electricity accounts for 25%, and the rest is other miscellaneous expenses.
The manganese ore in mainland China mainly comes from imports, with a dependence on foreign countries exceeding 90%, mainly in South Africa, Australia and Gabon, accounting for about 50%, 15% and 15% of the imports. The accident affected Groot Island accounted for about 80% of the overall shipments from Australia, and 74% of them were sent to China, which is expected to cause a reduction in the import of manganese ore from the mainland or 8%.
Zheng Shang Exchange: Implement trading limits on manganese and silicon futures varieties
Zhengshang announced that from May 14, 2024, the maximum number of non-futures company members or customers to open positions in a single day on the 2406, 2407, 2408 and 2409 contracts of manganese silicon futures is 2,000 lots, and the maximum number of open positions in a single day on other contracts of manganese silicon futures is 10,000 lots. The number of open positions in a single day refers to the sum of the number of buy and sell positions in a single futures contract on a day that is not a member of the futures company or a client. The maximum number of open trades in a single day for an account group with actual control relationship is executed on a per-client basis. The number of open positions for hedging and market making is not subject to trading limits. For non-FF members or clients who exceed the trading limit for the first time, Zhengzhou Commodity Exchange (hereinafter referred to as ZCE) will take regulatory measures to suspend the opening of positions for not less than 5 trading days. If the trading limit is exceeded twice in total, regulatory measures will be taken to suspend the opening of positions for not less than 1 month. If the circumstances are serious, it shall be dealt with in accordance with the relevant provisions of the Measures for Handling Violations of Zhengzhou Commodity Exchange.
Where is the limit of manganese-silicon?
Futures are available, manganese and silicon have risen so sharply, and naturally activists are indispensable to come to the top, when will this round of manganese and silicon rally be the end? Industry insiders said that the rise of manganese and silicon is rare, and naturally there are many bulls who want to make a profit and leave the market, so there is a sharp decline from time to time in the intraday, which should be caused by the bulls closing their positions, but each time they can quickly pull back and hit a new high, indicating that the market funds are still strongly bullish, in this case, we must not blindly touch the top.