More comments on the Ferroglobe/Glencore deal

My story on Glencore/Ferroglobe is continuing to garner comments. The latest is…

Glencore had been steadily increasing their manganese portfolio the last few years.

This represents the first time as far as I can remember of Glencore selling a ferroalloy asset. It appears to be a huge climb down from their normal strategy to control different alloys that they are involved in.

As to the North American market  – we assume no effect as there is really no spot market in North America for hcfemn .

And by selling the manganese asset no vested interest by Glencore to control manganese and try to artificially manipulate it up  – now they just get a steady commission for selling the material and the price sold is ferroglobes problem and not theirs anymore

To reply, I don’t think Glencore is aiming to sell into the spot market with Ferroglobe’s manganese and will probably seek some long-term agreements. And, while Glencore will be Ferroglobe’s agent, all matters will have to be approved by Ferroglobe and I doubt they would approve of any dumping of manganese get to ensure Glencore gets a sale. Also, we don’t know what agency agreement says. There could be some incentives not only for sale but also for price.

Finally, one reader pointed out that it still has to be approved by the EU’s competition commission. That’s right. Some steel mills might try to fight it, but the chances of success are pretty good considering the amount of Ferroglobe’s total production and the amount of silicomanganese used.

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