Chinese High Export Duty on Manganese Metal to Be Reviewed

The price of nickel continued to decline since the beginning of January 2012 to reach USD 7.18 per pound on July 13th 2012 for spot, the lowest since December of 2009. The growth in demand for manganese metal has been mostly on the demand increase from stainless steel production in the past as a substitute for nickel, but it looks not easy for the metal in the near future to keep its competitiveness.

According to ICDA's data, the percentage of 200 series (high in Mn) production in China's total output of stainless steel in 2011 was 26.5%, while the same of 300 series (nickel alloyed) was 46.5%, which naturally becomes higher if nickel price keeps the low level as it is now, resulting in smaller share of 200 series.

In Japan and Korea, production capacity of the refined ferromanganese (of high Mn and low P content) has been increasing during the past 2 to 3 years, causing decline in imports of Chinese manganese metal. Of course it will be difficult for the refined ferromanganese to totally replace manganese metal in consumption but the share in demand of the metal is definitely threatened.

In July 2012, the price of manganese metal slid further to USD 2,950 per tonne CIF Japan, which is undoubtedly reflecting the scheduled review of China's current export duty system, which is the biggest concern of the market participants, especially of the manganese metal producers who are suffering from very low profitability and expecting some structural changes anyway.