Manganese-silicon futures have risen 28.54% since April, and 5.27% on April 29

Affected by tropical cyclone Megan, Australian mining giant South32 announced the suspension of GEMCO operations. After discontinuing production for 1 month, it was announced in its quarterly report that it would continue to be suspended until the third quarter of the company's current fiscal year, January to March 2025.

Judging from the impact on China, it is estimated that the annualized impact is about 290 to 3.1 million tons of manganese ore shipping from Australia to China, accounting for about 9%-10% of China's imported manganese ore.

A derailment accident occurred on April 26 in Gabon, the world's second-largest producer of manganese. A track close to 300 meters was damaged, and 26 empty cars derailed. The impact of this accident is difficult to assess for the time being, and repair may take two weeks to a month.

Judging from Eramet's financial report, Gabon's monthly manganese ore shipments are over 500,000 tons/month. With the South32 manganese ore supply gap already existing for a medium to long period of time, if the repair time of the Gabonese transport railway is too long, it may cause the supply of manganese ore to become even more tight.

CITIC Securities believes that the suspension of operations of the main manganese ore under South32, the world's largest manganese ore producer, is expected to reduce global manganese ore supply by more than 10% in 2024 and reduce domestic manganese ore imports by about 300,000 tons per month. There is a risk of serious shortage of manganese ore supply in 2024. The application of manganese in battery materials is showing an accelerated trend. The sharp rise in manganese ore prices is expected to drive increased sector attention. It is recommended to focus on domestic companies with manganese ore resources and manganese material production layout.

Companies related to manganese ore price increases:

Southern Manganese (01091): Nanfang Manganese is a large-scale enterprise group for the production and development of manganese products integrating mining, selection and metallurgy. It is headquartered in Nanning, Guangxi. It is an important supplier of manganese products in the world, and is the main unit for drafting and approving quality standards for eight countries and industries of manganese products including the electrolytic manganese metal. Main products include electrolytic manganese, electrolytic manganese dioxide, manganese sulfate, and nickel cobalt lithium manganate ternary materials. According to the 2023 interim results, the profit attributable to owners of the parent company in the first half of the year was HK$453 million, an increase of 1955% over the previous year. The increase in revenue was mainly due to an increase in the average selling price of electrolytic manganese products and electrolytic manganese dioxide; an increase in sales from boron-added ore; and an increase in sales revenue from the trading business.