Manganese turns to an upward trend

  • Monday, January 11, 2021

  • Keywords:Manganese
[Fellow]Manganese turns to an upward trend going through the bumpy course of 2020, Mn showed encouraging signs at the beginning of the new year.

According to Argus media reports, on Monday, the ex-factory price of 99.7% flaky manganese ranges from 13,800-14,000 yuan/ton, an increase of 600 yuan/ton from the price on December 31. Prior to this, major manufacturers announced the next two months. The discontinuation plan.

Driven by rising production costs and the inventory of Ningxia Tianyuan, China's largest manganese smelter, manganese prices have risen by 30% in the past month.

Manganese price rise

Since December 10, the bid price of Tianyuan Manganese has increased by 500 yuan/ton per day. According to Argus Media, Baosteel, China’s largest manganese consumer, has also raised its bid purchase price for January delivery in response The rapid rise in spot prices.

The bid price of Baosteel's manganese flakes rose to RMB 15,000/ton (US$2,320/ton), an increase of RMB 3,800/ton from the beginning of December.

From this perspective, Baosteel’s bid price is equivalent to the spot price of 14,000 yuan/ton after deducting transportation and banking costs.

China's production slows down

Due to power shortages in many parts of China, production has fallen, and manganese prices in China are expected to rise in the near future.

Most Chinese manufacturers will suspend production for at least two weeks in February to maintain production during the Spring Festival holiday. After Ning Tianyuan called on other producers to better control output and support prices, some producers will also stop production in January.

The overall operating rate of China's manganese market is as high as about 70%, with a monthly output of 100,000 to 120,000 tons. The reduction in production of Tianyuan Manganese Industry may reduce the supply of 45,000 to 50,000 tons from the spot market from January to February.

Timely production of shrike

The spot price increase may benefit Element 25 Limited (Australian Stock Exchange: E25) (Australian Commonwealth Exchange: QFP), which will receive the key final approval for the Western Australian Shrike Manganese Project in December, which is the first Pave the way for the beginning of the first phase of construction and mining operations.

The company expects the first production to take place this quarter, and the first phase of the project may provide early cash flow to strengthen its balance sheet and assist in funding a larger high-purity manganese production center.

E25 has experienced strong stock price increases in recent months, and its market value is currently approximately US$204.3 million.

From 79 cents on November 2 to a record of $1.72 on December 10, it has reached $1.58 today.

Conservative pricing assumptions

Shrike is a world-class manganese ore resource. At present, JORC's manganese ore resource exceeds 263 million tons.

The latest update of PFS shows that the basic situation involves the annual production and sales of 364 thousand tons of massive manganese ore with a particle size of 30-35% (300-390 thousand tons in the first 1-5 years).

The net present value (NPV) of the base case is A$583 million, which shows that the project is robust and can provide returns even under conservative pricing assumptions.

The project is expected to achieve a breakeven when the price of manganese is US$2.38/dry metric ton (dry metric ton unit) 33% of the CIF (cost, insurance and freight).

Commodity sales price obligation

Key commercial terms, continue to agree to sell 100% of manganese ore production in a non-binding glossary-up to 365,000 tons per year, from OM Materials Pte Ltd, a subsidiary of OM Holdings Limited (ASX: OMH) in the first phase of the project. Pay or not" in the offtake agreement.

E25 also agreed to key commercial terms to sell 50% of the manganese ore produced in the second phase of the development of the Birder project to Semeru Energy Co., Ltd. in Singapore.

The non-binding letter of intent for investment stipulates that the annual minimum quota is 175,000 tons and the maximum quota is 200,000 tons.

A key component of the off-take clause includes that Semeru is obliged to reach the highest price for E25's manganese concentrate and requires E25 to instruct the delivery of manganese concentrate to certain customers to achieve the best price.

Semeru will have the right to purchase iron ore from E25 at a net profit margin of 2.4% of the cost and freight (CFR) price.

Euro Manganese Project

Euro Manganese Inc(ASX:EMN)(CVE:EMN)(OTCMKTS:EROMF)(FRA:E06) will also benefit from the strong manganese market prospects. The company is expected to complete its Chvaletice manganese project in the Czech Republic by mid-2021. Demonstration factory.

The plant produces about 32 kilograms of high-purity electrolytic manganese metal (HPEMM) per day, which can be converted into about 100 kilograms of dry crystal high-purity manganese sulfate monohydrate (HPMSM).

The company also plans to complete the Chvaletice feasibility study by the end of 2021, and its stock price has risen by 5% to 50 cents.

The company's stock price rose from 17.5 cents on October 2 to 61 cents on November 25, a record high, with a market value of approximately 92.6 million US dollars.

Strategic Positioning

The demand for high-purity manganese products is growing rapidly, mainly driven by the lithium-ion battery and electric vehicle markets, especially in Europe, where 100% of high-purity manganese products are imported.

Eastman Chemical’s goal is to be the only major producer of ultra-high purity electrolytic manganese metal in Europe. It aims to produce ultra-high purity electrolytic manganese metal (HPEMM) with specifications exceeding 99.9% manganese and ultra-high purity manganese sulfate monohydrate (HPMSM) with the lowest The manganese content is 32.34%, which exceeds the typical industry standard.

The company believes that the location of its project is at the heart of Europe's fast-growing electric vehicle production center, making it a European and global strategic asset.

  • [Editor:zhaozihao]

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