The global manganese ore market is facing significant challenges and disruptions, with the recent incident at the GEMCO mining operations in Australia causing a surge in prices and supply chain disruptions. The incident has led to a sharp increase in manganese ore prices, with a 30% surge since the incident, despite a 10% drop in port inventory.
The disruption at GEMCO, which supplies approximately half of the high specification manganese market, has created uncertainty in the market, with concerns about the duration of the supply disruption and the impact on global manganese supply.
The manganese sector is facing challenges due to the weakening Chinese real estate market and the ongoing US-China trade war. Midstream players, such as silicon manganese producers, are currently operating at a loss, leading to a decline in capacity utilization rates.
The current situation in the manganese market is unique, with the supply from Australia and Ukraine unlikely to be restored in the near term, creating a structural deficit in the market. The accelerated depletion of high-grade Australian manganese ore is expected to worsen port inventory levels, potentially breaching safety inventory levels.
Despite the challenges, the manganese market has shown resilience in the past, with prices stabilizing after disruptions in supply. The industry is closely watching the developments in the market and the impact of the GEMCO incident on global manganese supply and prices.
Disclaimer: The information in this article is not financial advice and reflects the opinion of the author. The author may hold positions in stocks mentioned.