manganese outlook 2008

  1. 365 Posts.
    OUTLOOK
    The operational and financial results for 2007 were driven by the strengthening market for
    manganese ore and alloy and the strong appreciation in pricing for manganese particularly in the
    last three quarters.
    Manganese prices continue to remain buoyant, with landed prices negotiated for shipments to
    Chinese customers for the first quarter of 2008 exceeding prices achieved for the December 2007
    quarter. These price increases over the previous quarter are consistent with expectations that
    the manganese market will remain robust throughout 2008, underpinned by continued strong
    demand for high grade manganese product and a number of supply issues continuing to be
    experienced by key ore suppliers.
    The further strengthening market has recently been evidenced by the price setting secured
    between Nippon Steel and BHP Billiton, on the price of manganese ore for shipments to Japan
    for the year commencing in April 2008 to March 2009, with a price determined at US$11.20/dmtu
    (FOB) as the benchmark price (for lump ore with Mn content of 48%). This represented an
    increase of US$8.50/dmtu compared with US$2.70/dmtu (FOB) applied to shipments in the year
    April 2007 to March 2008 and further indicates that landed prices to China for 2008 should be
    further strengthened.
    Despite the volatility within financial markets the long term fundamentals underpinning the market
    for all global carbon steel and stainless steel materials – including manganese – remain very
    positive and continue to be driven by the strong growth of the Chinese economy. Overall the
    outstanding turnaround in operating and financial performance from all business units particularly
    in the latter half of 2007 has remained sustained into 2008 and is expected to continue
    throughout 2008. The strategy for 2008 will be on assessment of expansion opportunities at both
    the Australian and China based operations and the development of further growth opportunities
    internationally.
 
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