How will Ferroglobe’s purchase of Glencore’s Mn assets affect the market?

Suppliers and consumers are thinking about how Ferroglobe’s purchase to Glencore’s two European manganese and Glencore’s marketing of all Ferroglobe manganese alloys will affect the market.

Obviously, there is one know, it won’t change the supply picture since all the plants are running at or close to capacity though Ferroglobe can provide some technical expertise.

So, it all comes down to marketing and sales. At least some of the sellers applaud the move, saying by Glencore selling all the manganese it will be in strong hands and hopefully Glencore can “manipulate” the market to boost prices. This was seconded by others, pointing out that Ferroglobe has a much larger footprint in the market down.

“I can see Glencore getting out of the spot market and indexes,” one competitor said, “and increasing its sales to mills under quarterly or long-term agreements.”

As Ferroglobe also admitted it was a regional player in manganese and how with Glencore’s help has become a more international company.

Since Glencore started marketing some of Ferroglobe’s output in 2017, more Ferroglobe manganese has started to show up in the US, traditionally the premium market.

In the first three quarters of 2017, US imports of high-carbon ferromanganese from Spain increased to 12,322 mt vs. 312 mt for ALL of 2016. On the other hand, imports from Norway fell to 721 mt the first nine months of 2017 vs. 9,016 mt in all of 2016.

Imports of silicomanganese from France registered at 2,300 mt in the first three quarters of 2017 vs. zero in 2016 and imports from Spain rose to 17,843 mt vs. 11,242 mt on the same periods. Finally, imports from Norway were 20,735 mt in the first nine months of 2017 compared to 37,223 mt in all 2016.

(Note: All of Ferroglobe’s manganese plants were in Spain while Glencore had plants in France and Norway.)

The question is now whether Glencore sees the US at its target market for more of Ferroglobe’s manganese sales. However, the US market is getting crowded with more manganese from Malaysia and Saudi Arabia.

So far every attempt at consolidation in manganese sales has been met with more entrants, due on large part to the favorable margins.

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