The Rising Manganese Bull Market

Though manganese is the fourth most closely consumed steel - behind iron, aluminum and copper, most buyers have failed to watch the dramatic bull market in manganese which started unfolding this previous spring.

About 34 million tons of manganese ore have been mined in 2006.

Manganese (Mn) is a key element in metal and iron manufacturing, which accounts for as much as 90 p.c of the steel's present consumption. However, the gray-white steel additionally performs an necessary function in low-cost stainless-steel formulation and aluminum alloys. For instance, manganese steels include as much as 14 p.c Mn.

In 2006, the worldwide unit consumption of manganese ferroalloys was roughly 10 kilograms alloy per metric ton of metal produced.

In specialty alloys, the place nickel is changed partially or totally by manganese, the Mn content material can run as excessive as 16 p.c. Hadfield Metal accommodates 13 p.c or extra manganese. This model of metal requires toughness and wear-resistance for functions in gyratory crushers, jaw crusher plates, rail metal and reducing edges for earth-moving tools.

Earlier this 12 months, Allegheny Ludlum defined excessive costs had pressured the specialty steelmaker to exchange nickel with manganese in a few of its merchandise. This spring, Finnish stainless-steel producer Outokumpu launched a duplex stainless product, LDX 2101, as a nickel-free stainless. The product makes use of a higher proportion of manganese as a substitute of nickel.

The place functions allow, the stainless-steel market is taking to maneuver away from austenitics to duplex, ferritic and different grades as a way to rely much less upon nickel. One report recommended chrome-manganese manufacturing may soar by 50 p.c inside two years. Consequently, the nickel-chrome grades may lose 20 p.c of their stainless-steel market share.

Why Manganese?

Other than a small circle of metallurgists, chemists and miners, manganese shouldn't be a widely known component. Look-wise, it resembles iron.

By advantage of its properties - sulfur-fixing, deoxidizing and alloying, manganese is important to iron and metal manufacturing. In the event you dropped a crescent wrench on a cement flooring, it might shatter into items if the wrench have been made with out manganese. It's the 'glue' that binds, hardens andvents iron and metal merchandise from being too brittle.

Some manganese compounds have been added to gasoline to spice up octane ranking and cut back engine knocking. In natural chemistry, manganese dioxide is used as a reagent for the oxidation of benzylic alcohols. Manganese has a big selection of commercial makes use of - rust and corrosion prevention on metal, paint pigments, dry cell and alkaline batteries, animal feed, glass manufacturing, fertilizers and lots of medical and well being functions.

China will rely on the manganese in railroad metal rails because the nation dramatically develop its rail system over the following decade.

The automotive business will rely on manganese for the following technology of hybrid electrical automobiles and gas cells. Manganese cannot solely cut back prices in automobile physique elements - providing much less weight in auto frames, however it may additionally add higher structural energy. Toyota reportedly is near perfecting a lithium-manganese ion battery for the Hybrid Electrical Automobiles (HEV). The brand new technology cathodic supplies embody manganese and have extra energy functionality, longer runtime and are less expensive as a result of they're smaller and lighter.

Aluminum alloys make the most of small portions of manganese to reinforce corrosion resistance. Many industrial copper alloys include as much as two p.c manganese. And uranium ore is processed with manganese as an oxidizing agent to supply yellowcake to be used in nuclear reactors.

New functions for manganese are being researched. Lately, at Kyoto College in Japan, researchers have developed a brand new course of designed to breed the photosynthesis course of. Through the use of manganese dioxide, it could be attainable to soak up a big amount of carbon dioxide (CO2) emissions, which contribute to international warming.

In accordance with the US Geological Survey, "Manganese has no passable substitute in its main functions."

On the Manganese Manufacturing Entrance

Over 80 p.c of the recognized world manganese sources are present in South Africa and the Ukraine. Different main manganese deposits are situated in China, Australia, Brazil, Gabon, India and Mexico. Lately, as much as 60 p.c of world manganese ferro-alloy manufacturing comes from South Africa, China and the Ukraine.

The US imports greater than 50 p.c of its manganese from South Africa and Gabon.

Fewer international locations now produce manganese and ferro-manganese than within the earlier decade. Main producing international locations similar to Canada and the UK ceased manufacturing within the early 1990s. Japan and Germany curtailed their output throughout an period of 'low-cost manganese' when the steel bought for pennies per pound.

By 2001, the manganese ferro-alloys business estimated it had a 40-percent overcapacity - a lot of this was present in China and the CIS. China closed lots of its unprofitable manganese operations; fewer than 10 out of 800 have been believed to be worthwhile.

At present, no new manganese mines seem on the near-term horizon.

As has been discovered with different metals - predominately uranium and molybdenum, a 'drought' over multiple or 20 years brought on costs to dramatically rise lately. Manganese's worth rise is similar situation present in different mineral areas - far too few new mines for a lot too a few years.

However, manganese demand jumped by 14 p.c.

In accordance with the Worldwide Iron and Metal Institute, world crude metal manufacturing of the 67 reporting international locations elevated by 10.2 p.c of 2007 in comparison with the comparable interval a 12 months earlier.

Within the report for 2007, the Worldwide Manganese Institute introduced, "Manganese demand prospects have by no means been so good." Key factors included:

o Manganese intensive metal grades to develop quicker than common

o Particular manganese consumption rising once more

o Metal demand to exceed six p.c per 12 months for a few years to come back

o Restricted down dangers for the following ten to fifteen years

Observe: Manganese-intensive steels symbolize 13 p.c of complete stainless-steel manufacturing, however devour 41 p.c of the full quantity of manganese consumed by the metal business.

To satisfy the rising demand, BHP Billiton introduced it had ramped up manganese manufacturing to a file 1.5 million tons. Consolidated Minerals Ltd of Australia has dramatically elevated manganese manufacturing over the previous two years. Different massive manganese mines have additionally elevated manufacturing.

US Manganese

As a result of it's important to metal manufacturing, the US authorities considers manganese a strategic steel. In accordance with Lisa Corathers, US Geological Survey manganese commodity specialist, "A continued provide of manganese supplies is important to any protection effort in addition to to upkeep and progress of an industrial financial system."

Involved about ample inventories, the US authorities started stockpiling manganese after World Warfare II. However, by 1965, the federal authorities started promoting off manganese supplies, which they believed have been in extra of what was required. By 2003, the federal government had whittled down its stockpiles to lower than two years of manganese consumption.

Corathers mentioned, "The US has been reliant upon 100 p.c of its manganese wants since 1985."

We talked with Larry Reaugh, chief government of Rocher Deboule Minerals Corp - which lately acquitted the open pit-able Artillery Peak (Arizona) manganese useful resource. With out we're mistaken, he's the one junior mining explorationist presently buying manganese sources in the US and Canada.

Reaugh informed us, "I've been watching manganese intently for the previous a number of months. The value has risen dramatically this 12 months, bringing massive low grade deposits into the realm of feasibility."

He identified, "Manganese is among the prime 4 strategic metals in the US, which has no home manufacturing, and which can also be topic to imports from international locations which for probably the most half have political instability. "He mentioned.

Though costs for nickel, cobalt, vanadium and molybdenum have respectably surged greater by seven-fold, four-fold, six-fold and six-fold, manganese has however doubled in worth. The grey-white steel could have extra room for progress within the years forward.

COPYRIGHT © 2007 by StockInterview.com

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