Manganese: An Unsung Hero

July 28, 2009


Prospects For Manganese

Manganese's use in steel production is a double-edged sword, as the metals' fortunes are intimately tied to those of the steel industry. Whenever there's a severe downturn in steelmaking, manganese also usually faces such a downturn.

While world steel production fell nearly 2% in 2008, the figures for this year are even more dismal. The latest numbers from the World Steel Association for this past May indicate that global crude steel production had dropped 21% year-over-year, and in the first five months of 2009, total world crude steel production is down some 22.4% against the same period last year.

The effects on the prices of both ferromanganese alloys, EMM and manganese ore, are illustrated in the charts below:


Manganese Alloy Prices

Note: U.S. free-market duty paid FOB Pittsburgh

Source: Mark Camaj, IMnI (from Metal Bulletin)


Manganese Commodity Prices


Note: Alloys - U.S. free-market duty paid FOB Pittsburgh; EMM - free market warehouse. CRU: Mn Ore China spot import

Source: Mark Camaj, IMnI (from Metal Bulletin)


That said, it appears that ore producers and smelters, together with alloy smelters and steel mills, have reacted promptly and in a considered fashion to the current difficulties in the market, cutting production and reducing inventories.

How long the current crisis will last is anybody's guess, but manganese's future does not look all that dismal. In particular, if China and India continue to develop as they have over the past several years, the outlook could actually be quite bright.

Especially considering that even though manganese is absolutely vital to the U.S. both for civilian and defense applications, the country is totally reliant on imports to meet its needs. The only manganese mined in the U.S. is some incredibly low-grade ore from a few South Carolina mines, which is used to color bricks. And the U.S. produces no synthetic manganese dioxide or manganese metal, meaning it must import nearly 75% of all the manganese ferroalloys it consumes.

Despite this, the U.S. has no manganese metal in its National Defense Stockpile. It has, as described on the Defense National Stockpile Center's Web site, "Sold Out." There is still some ferromanganese left for sale and, indeed, some 500 short tons of the stuff were sold in June this year.

According to the USGS, between 2004-2007, 61% of U.S. imports of manganese came from Gabon; for ferro-manganese, South Africa supplied 53% and China 18% over the same period. In addition, according to Asian Metal Ltd in China: "China is the dominant supplier of manganese metals in the world." It may, therefore, not be surprising that Congress has recently been taking an interest in manganese and its strategic importance for the U.S.


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