Recently, the price of manganese ore continues to rise.CtrteamracingThe price rose by more than 60% in one month, causing the share prices of relevant listed companies to rise sharply, but because China's manganese ore needs to be imported in large quantities, the beneficiaries of the rise in manganese ore prices are not in China, and only a small number of listed companies have benefited.
Among them, southern manganese industry, Xiangtan electrification (002125) and other companies with manganese ore take the lead in this wave of share price rise.
Rely on imports
There is a sudden factor in this wave of manganese ore prices.
From 16 to 17 March 2024, Cyclone Megan seriously affected the operation of South32's GEMCO facility in Australia and caused the mine to suspend operations on 18 March. Since shipments were shipped in early March and were not affected, the overall impact of the market assessment was limited at that time.
On April 17, 2024, South32 emailed that the suspension of Australian mine shipments would continue to affect at least June 2024.
South32 said in its latest quarterly report on April 22, 2024 that it expects to resume terminal operations and export sales in the third quarter of fiscal year 2025, that is, the first quarter of 2025. Alternative transport options are currently being evaluated to mitigate the impact of ore shipments. On the same day, manganese silicon index futures rose nearly 200 points, a strong rally officially began.
At first, the market did not realize that the incident would have much impact on manganese ore prices, but waited until a month later to slowly ferment, which is also in line with the recent rise in small metal prices.
In addition, there is another unexpected factor that the market has paid less attention to. The derailment occurred in Gabon, the second largest manganese mining country in the world, on April 26, causing damage to the track of nearly 300 meters and 26 empty cars derailed, which may take about two weeks to a month to repair. The monthly transport volume of manganese ore from Gabon is more than 500000 tons / month, and under the condition that the supply gap of South32 manganese mine has existed for a long time, if the repair time of Jiapeng transport railway is too long, it may cause further shortage of manganese ore supply.
China's manganese ore has low taste, and poor manganese ore reserves account for 93.6% of the country's total reserves, with an average manganese content of 20-30%, mainly concentrated in Hunan, Guizhou, Guangxi and Chongqing. While the imported ore grade is high, the slag quantity is small, the cost is low, and the environmental pollution is small (for example, the manganese ore taste of the Kalahari mining area in South Africa is 30% Mel 50%, and the manganese ore taste of Groot Island mining area in Australia is 40% MUE 50%). Every year, China imports a large number of manganese ore from South Africa, Australia and other countries to make up for the lack of domestic demand for manganese ore.
Manganese ore needs to be imported in large quantities, according to the data of 2023CtrteamracingIn 1998, China imported 31.42 million tons of manganese ore, while only 7 million tons of manganese ore was produced domestically. China's dependence on overseas manganese ore is as high as 80%. This is only a rough calculation of mineral output. Due to the low taste of manganese ore in our country, if converted into metal, the degree of import dependence is more than 90%.
Market
In 2022, China imported 70 per cent of the world's manganese ore, followed by India (12.1 per cent), Norway (3 per cent), South Korea (2.5 per cent) and Malaysia (2.3 per cent). South Africa is the world's largest exporter of manganese ore, accounting for 58.5 per cent of global manganese ore exports in 2022, followed by Gabon (22.3 per cent), Ghana (8 per cent) and Brazil (3.14 per cent).
Last year, China imported 14.64 million tons of manganese ore from South Africa, accounting for 49 percent of the total, 5.25 million tons from Australia, accounting for 18 percent, and 4.9 million tons from Gabon, accounting for 16 percent.
Some experts estimate that the incident in Australia may affect the import of manganese ore to 3 million tons.
At present, the inventory of manganese ore in Chinese enterprises is 5.113 million tons, compared with 6.041 million tons in the same period last year, 5.54 million tons in the same period in 2022 and 6.013 million tons in the same period in 2021.
The shortage of high-grade ore can not be made up, which leads to the resonance rise of low-grade ore and rich manganese slag.
The rise in manganese ore prices has also spawned the enthusiasm of enterprises to purchase, the enthusiasm of manufacturers to replenish the stock has declined, and the number of inventory days has dropped by more than 30% compared with the beginning of the year. Inventory in Ningxia and southern production areas has rebounded slightly from absolute lows in the past month, and the mentality of buying up and not buying down is the main reason, driving a certain amount of rigid demand to replenish the stock.
Benefit
The provinces and regions with the highest manganese ore output in China are Guangxi, Guizhou and Hunan respectively. Due to years of mining, China's relatively high-quality manganese ore resources have been basically exhausted, and the economic benefit of manganese mining in China is relatively low.
According to the data of the United States Geological Survey, China's manganese ore production has been declining in the past 10 years, with a large decline in 2016-2018 and 2021.
This is similar to iron ore. Due to the high iron content and easy mining of overseas iron ore, imported iron ore is mainly used in China's iron and steel industry.
The beneficiaries of the rise in manganese ore prices are mainly manganese mine owners. China's manganese industry is mainly downstream processing, and 90% of manganese is used in the iron and steel industry, which is also the reason why China imports most of the world's manganese ore. China's steel industry has a large scale and supporting demand.
The rise in manganese ore prices does not mean that the lower reaches will benefit from this. It depends on whether the iron and steel industry can accept the price increase, otherwise the processing link will bear the cost of price increase. Originally, the profit of manganese processing link is not high, and the price increase is even worse. This is different from the increase in the price of lithium carbonate, which is driven by the outbreak of demand in the downstream new energy industry. The price increase of manganese ore is due to a temporary reduction in supply, after the reduction of iron ore supply and the increase in price, the profits of China's steel mills have been seriously damaged.
The leader of China's manganese industry is the southern manganese industry. At present, the southern manganese industry has 110 million tons of manganese ore resources (91.41 million tons of rights and interests), 23.5% taste, 84.94 million tons of reserves (74.68 million tons of rights and interests), and 20.0 percent taste. The company, formerly known as Guangxi Big Manganese Industry, developed and invested in the PALING manganese mine in South Africa in 2009, and the company has a total of 6 manganese mining rights in South Africa.
In 2010, the company listed its shares in Hong Kong, raising funds for the acquisition of Gabon's manganese mine.
The main products of western gold are standard gold, electrolytic metal manganese and manganese ore, with two manganese ores (reserves of 12.09 million tons), respectively Baiyuanfeng and Mengxin Tianba, with an average grade of 31%. The company expects manganese ore to increase to 1.09 million tons by 2026.
At present, Xiangtan electrified Nanmuchong Manganese Mine holds manganese ore reserves of 194100 tons, with an average grade of 15.12%. Aitun Manganese Mine identified more than 2 million tons of manganese ore resources, of which the average grade of manganese oxide ore is 23.41%, and the average grade of manganese carbonate ore is 13.97%. At present, Aitun Manganese Mine has completed the previous review and filing, development and utilization plan and other related work, is carrying out a new application for mining rights, and the follow-up procedures such as environmental assessment and safety assessment need to be completed.
The company recently said that it will develop endogenously and externally, and while doing excellent stock, it will also actively look for increments, increase investment and M & An efforts around the upper and lower reaches of the industrial chain, and consider promoting overseas expansion at the right time.
Hongxing Development Sun Co., Ltd. Guizhou Songtao Hongxing Electrochemical Mining Co., Ltd. and Wanshan Pengcheng Mining Co., Ltd. each have a manganese carbonate mine with a total production capacity of about 250000 tons / year, with an output of 114200 tons in 2024. the two mines are respectively carrying out reserves verification and safety production permits.
Sinosteel Tianyuan, which does not have a manganese mine, said it was seeking to acquire manganese resources.
Chinese companies strive to expand mining resources overseas, and in 2016, Ningxia Tianyuan Manganese Industry formally signed a contract with United Mining Co., Ltd. (CML) to acquire all shares and assets of CML.
In 2016, Bosai Mining Group completed the acquisition of the Manganese Mine in the Matthews Mountains of Guyana, which now has proven reserves of nearly 30 million tons, high ore grade and is an open-pit mine.
In terms of stock price, the southern manganese industry, which has manganese ore resources, led the rise, with investors chasing the company, which more than doubled its share price, followed by Xiangtan Electric, Western Gold (601069) and Hongxing Development (600367).
This article was first posted on the official account of Wechat: e Company. The content of the article belongs to the author's personal point of view and does not represent the position of Hexun. Investors operate accordingly, at their own risk.