This morning Bluescope Steel announced it was deferring restarting its No.5 blast furnace at Port Kembla due to market conditions.
Late last week, South Africa’s number two manganese producer, Assmang, said it was cutting back production of its two steel feed-stocks, manganese and chrome, due to the 24 per cent decline in global steel production in April. Ferromanganese is added in the process to strengthen steel - and there is no substitute for manganese in this process. Moreover, the percentage of manganese being used by mills has been rising as makers trend toward producing higher quality steels.
The falling demand for manganese is the short-term situation. Longer term, of course, steel production will pick up and manganese will again be in strong demand, and we will almost certainly see a return to the high contract prices that were locked in for 2007 and some of 2008.
And you have to remember that the weaker players will be going to the wall.
Northern Territory manganese producer OM Holdings said this morning it was expanding its product range to take advantage of new market opportunities. It noted that many higher cost, low grade Chinese domestic and marginal seaborne ore producers were not economic and - most importantly - were ceasing production at these present low prices.
The explorers are hard at it, too.
Aurora Minerals has identified new high grade manganese zones at its Capricorn East project southwest of the large Tom Price iron ore mine. Sampling produced assays up to 53.5 per cent. And AusQuest said it has identified 1.5km-long strike zone at its Wolfe manganese project in the Kimberley region, with another 10km still to be mapped.
SourcE: The Australian
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