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    Chinese manganese ore & alloy market to remain sluggish in Q3
    ----Interview with Ma Zhe
    General Manager
    Hubei Wuzhantian Industry Co., Ltd.
    Established in 2013, Hubei Wuzhantian Industry Co., Ltd. is located in Tongjian Jinxiu Jiangnan, Zhongbei Road, Wuchang District of Wuhan City and mainly engaged in transactions for metallic ore, non-metallic ore (excluding coal) and ferroalloy.

    Asian Metal: Thank you for accepting our interview. Could you please introduce your main business?

    Mr. Ma: We mainly focus on domestic trade for manganese ore and alloy with a little for other alloys. We have imported about 10,000t of manganese ore till early this month and expect to import 6,000t of chrome ore via Qinzhou port. South African manganese ore is the mainstream one in China, for which we mainly trade back-to-back with little participation in the spot market. Since April this year, transactions for manganese ore have been depressed in China with prices declining constantly. We didn't import after last deal but mainly stood on the sidelines with no inventory held on hand, planning to restock after the market recovers.

    Asian Metal: What's your regular monthly trade volume for silicomanganese and ferromanganese?

    Mr. Ma: We also trade silicomanganese and ferromanganese besides manganese ore. Our monthly sale for manganese alloy is close to 4,000t when the market is good, but when the market is sluggish, our monthly sale is only about 1,000t. We adjust the volume based on consumers' demand. For example, the market weakened from May to June, so we cut deals accordingly to avoid risks.

    Asian Metal: The manganese ore and alloy market is unlikely to improve in Q3. Will you adjust trade volume?

    Mr. Ma: As for manganese ore, we mainly trade back-to-back via long-term contracts. Considering the sluggish market in Q3, we expect no rise in deals but would conclude transactions based on customers' demand; otherwise, we won't import or sell on the spot market for the time being. As for manganese alloy, the demand shrank a lot compared with the same period of last year affected by the dim steel market. Furthermore, demand may not increase in Q3. Thus, we would maintain regular customers without increasing trade volume.

    Asian Metal: Where do your customers come from?

    Mr. Ma: Our manganese ore consumers are mainly in South China, such as Guangxi, Yunnan and Guizhou. While manganese alloy consumers are mainly steel mills in East and South China as we directly supply the material to steel mills.

    Asian Metal: Downstream steel mills' demand for manganese alloy improved a little compared with that of last month, so will you increase stocks in July?

    Mr. Ma: We saw little profit from silicomanganese and HC ferromanganese deals in the first half of June and almost suffered losses, but now, with the steel market recovering, demand for silicomanganese is expected to increase, so we would raise stocks properly this month and sell in July when market is better. However, we won't add too much stocks this time for fear of risks as the manganese alloy market trend is not firm.

    Asian Metal: There is little spot material in main production regions of silicomanganese. How do you think about the market in near future?

    Mr. Ma: As far as I know, spot supply for silicomanganese 65/17 is tight in Guizhou, Guangxi and Yunnan; producers offer no less than RMB7,400/t (USD1,072/t) EXW D/P. But as prices for raw material manganese ore edge down, silicomanganese prices would find little support to rise in short period and hold stable. Ferromanganese producers on the spot market mainly execute orders and hold limited stocks. The transactions are expected to be stable before late this month.

    Asian Metal: Where do you purchase manganese ore and alloy?

    Mr. Ma: We mainly purchase manganese ore from South Africa as South African manganese ore is the mainstream one in China. In 2018, the total imports of manganese ore are 27 million tons, of which about 11 million tons were South African manganese ore. For silicomanganese and ferromanganese, we mainly purchase from South China and also pay attention to the market in North China. We would also purchase from North China if the prices are lower there.

    Asian Metal: What else do you trade?

    Mr. Ma: Besides manganese ore and alloy, we also do business for ferrochrome, chrome ore and ferromolybdenum with the largest monthly trade volume at 1,000t.
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