Asian Metal: Hello, Ms Xu. Thank you very much for this exclusive interview with Asian Metal. First of all, please briefly introduce the manganese ore business of your company.

Ms Xu: We are mainly engaged in businesses of manganese ore, chrome ore, nickel ore, etc. Earlier, we dealt with mining, export and import of Indonesian manganese ore and nickel ore and the company operated well. Currently, we mainly focus on self-mining, imports and sales of high-Si and low-Fe manganese ore, high-Mn and low-Fe manganese ore and high-Fe washing boiler manganese ore imported from countries like Turkey, Zambia, South Africa, etc. Meanwhile, our business also covers trading of chrome ores from South Africa and Turkey with stable consumers. We have also set up long-term cooperation with ferroalloy plants in Inner Mongolia, Ningxia, Henan, etc. and kept monthly imports stable.

Asian Metal: Manganese ore prices are facing a dilemma for both increase and decrease. What is the main reason in your opinion?

Ms Xu: This situation is mainly resulted from the large and medium-sized stocks at ports and high and medium profits from alloy plants. Meanwhile, continuously steady prices on the international market also fueled the dilemma. The import prices in terms of RMB have been almost in line with or even higher than spot prices and thus manganese ore prices are in difficulty for decreases. In addition, high import prices also curbed the imports of manganese ore to some degree, helping to control port stocks of the material. Seen from the size of Chinese domestic importers of manganese ore, they are tending to be larger and more concentrated instead of small and sporadic. Large importers play an important role in stabilizing the prices as they have dominance in pricing benefiting from larger proportion in total imports of manganese ore. Currently, the trend for stabilization of the manganese ore market is a result of long-term seesaw battle and only in this way can importers and alloy plants form a favorable supply-chain relationship.

Asian Metal: What impacts are imposed on port stocks and spot prices of manganese ore by production limitation from steel plants in North China?

Ms Xu: The production limitation from steel plants in North China will affect the demand for silicomanganese, ferromanganese and other alloys. However, according to statistics, the total output of steel is on the upward trend in China. Handsome profit can be made from steel production and the production limitation is just temporary. As a result, alloy plants will finally start to resist when steel plants continue to press down prices. Alloy plants might hold back for sales and deliver some ores to futures transaction warehouses to cope with this maneuver from steel plants. Major production regions will see limited influence and manganese ore producers would stand on sidelines before the success of this seesaw battle. Therefore, port stocks of manganese ore are relatively stable and spot prices might see no major changes.

Asian Metal: What do you think of the current spot price trend for manganese ores and why?

Ms Xu: Spot prices for manganese ores fluctuated sharply this year, but the risks are in control. Take Australia-origin ores for example, prices for this material hover in the range of RMB50-60/t (USD7.58-9.09/t). Currently, the production limitation directive has been carried out in Ningxia Pingluo and 27 sets of submerged arc furnaces (total capacity of 339,000KVA including 265,000KVA for silicomanganese) would be affected, which will last for one month with 40,000-50,000tpm of output reduced for silicomanganese. Thus, silicomanganese prices will rebound for sure. From this perspective, the impact from production suspension on the silicomanganese market is much more significant compared with that on manganese ore stocks and prices. Manganese ore prices would rebound after short-term weak stability, but prices for Australia-origin ores would see limited changes.

Asian Metal: At the end of the year, will your company adjust imports in view of the sluggish alloy market?

Ms Xu: Our imports of manganese ore are stable, and the short-term changes in demand will not impact our imports too much.

Asian Metal: How about the current manganese ore inventory at ports?

Ms Xu: Our manganese ores are mainly futures and thus manganese ore stocks are limited at ports. Deliveries of Zambia-origin high-Mn and low-Fe manganese ores are consecutively arriving at Tianjin Port and high-Si and low-Fe ores are loading. There are some stocks of high-Fe ores at Lianyungang Port. Port stocks accumulate about 10,000t at present.

Asian Metal: What is the future plan for your company?

Ms Xu: Our company will continue to focus on manganese ore varieties and further develop new varieties, so as to better meet the needs of and provide better services to our customers.

Asian Metal: The domestic manganese ore market sees limited deals concluded, but overseas large plants are unwilling to lower prices. How do you think?

Ms Xu: Overseas mines adopted stable pricing strategy in transactions from this year instead of previous radical pricing policy, which adapts to the stability pursuit from domestic importers and alloy plants. Limited deals are temporary while the whole trend is favorable. Let’s look forward to a better tomorrow.