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1. Port manganese ore inventory hits a record low, and the logic of supporting prices has become a foregone conclusion
The latest data shows that the manganese ore inventory at Tianjin Port has dropped to 2.6 million tons, setting a new record low for the same period in history, and is expected to fall further to around 2.52 million tons in the next week. This data not only confirms the continued tight supply of manganese ore, but also directly boosts the willingness of miners to support prices.
Looking back at the past two years, manganese ore port inventory and prices have shown a significant negative correlation: when inventory decreases, ore prices tend to strengthen. The current inventory has fallen below the historical support line, which means that manganese ore prices have little room to fall. It is particularly noteworthy that the arrival volume of mainstream minerals such as South Africa and Australia continues to be sluggish, coupled with events such as delayed shipments from Gabon, the contradiction between supply and demand of manganese ore is difficult to ease in the short term
2. As the futures delivery month approaches, shorts face the dilemma of “no goods to deliver”
The 04 contract of manganese silicon futures is about to enter the delivery month, but the current position is still high, and the market’s doubts about the delivery ability of shorts are intensifying. On the one hand, there is a shortage of manganese ore in the port. If short sellers want to deliver, they need to purchase spot ore at a high price, which increases the cost pressure sharply. On the other hand, the inventory of silicon manganese in the main producing areas such as Inner Mongolia and Ningxia is high, but the deliverable resources are limited, which further exacerbates the delivery contradiction.
Historical data show that the delivery volume of manganese silicon contracts often drops sharply due to insufficient motivation of sellers (for example, the delivery volume of manganese silicon 1805 contract in 2018 decreased by 68% compared with the previous contract). If the current short sellers cannot organize enough supply, the market may face the risk of forced liquidation, which will push the price to rebound beyond expectations.
3. The myth of Inner Mongolia’s “cost advantage” has been shattered, and the entire industry is forced to reduce production due to losses
Inner Mongolia has always been known for its advantages such as low electricity prices and large-scale production, but now even this cost “lowland” has fallen into a quagmire of losses. It is estimated that the current ex-factory cost loss of silicon manganese in Inner Mongolia has reached 170 yuan/ton, and the losses in Ningxia and Guangxi have exceeded 400-920 yuan/ton. Even if some companies reduce power consumption through technical transformation (such as converting AC furnaces to DC furnaces), the high prices of manganese ore and coke still have no solution on the cost side.
What is more serious is that steel mills continue to suppress purchase prices. In March, the tender price of silicon manganese of Hesteel Group was only 6,400 yuan/ton, while the cost of the main production areas in the north was generally above 7,500 yuan/ton. The price inversion caused a sharp deterioration in the company’s cash flow. If the prices of manganese ore and coke do not fall, the leading companies in Inner Mongolia may also be forced to reduce production or even stop production.
4. Key variables in the future: mineral price game and policy support
Manganese ore shipment and substitutes: South Africa’s 32 Group’s shipments have been delayed until the first quarter of 2025, but alternatives such as manganese-rich slag and sintered ore have weakened the momentum for rising ore prices. If the inventory of low-priced ore is exhausted, ore prices may rise again in a pulsed manner.
Policy intervention expectations: The dual energy consumption control policy for the ferroalloy industry in Inner Mongolia has not yet been implemented. If electricity prices are increased or capacity is replaced, profits will be further squeezed.
Steel mill demand: Weekly output of the five major materials has dropped, and silicon and manganese demand is weak. However, if the real estate “guaranteed delivery” policy is implemented, the demand for the black chain may pick up temporarily.
5. Investor strategy: Beware of volatility risks under “low inventory + high holdings”
The current silicomanganese market is in a complex game of “low inventory, high cost, and weak demand”:
• Bullish logic: Strong mineral prices + insufficient delivery resources support the strengthening of near-month contracts.
• Short-selling logic: The industry-wide losses force production cuts, and the expectation of oversupply in the long term is still there
It is recommended to closely monitor the speed of manganese ore destocking at ports and the scale of production cuts in Inner Mongolia. In the short term, long orders can be arranged on dips, but in the medium and long term, we still need to be vigilant against the risk of cost collapse.
Conclusion: The darkest moment of the silicomanganese industry has not yet ended, but with inventory falling below historical extremes, any supply disturbance may cause sharp price fluctuations. Both industrial customers and investors need to do a good job of risk control and be wary of “black swan” events!
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