With the first cases of the Omicron variant detected in southern Africa, South Africa’s manganese ore production throughout Africa is at risk of further disruptions. South Africa is the world’s largest exporter of manganese ore, supplying over half of total seaborne trade; so, a repeat of the three-week national shutdown of mining operations earlier this year (when reportedly 1.2 MMT output was lost), will undoubtedly negatively impact exports. Any further production suspensions will disproportionately affect the Supra market, as an increasing percentage of global trade is carried in these ships.

Around 70% of all manganese ore exports are destined for China where stockpiles hit record levels late last year and have remained high especially in the second half 2021 as China reduced domestic steel production. China’s manganese ore imports have fallen every quarter this year; China’s imports of manganese ore to October stood at 25.6 MMT, roughly on par with 2020 but below the 27.7 MMT imported in 2019.

Until the sharp fall in iron ore prices at the end of Q3 which dramatically reduced India’s iron ore exports, the Indian Ocean had by some distance been the strongest market for Supra-Ultra sector across all three basins this year; since the end September the Indian Ocean in line with the Pacific has fallen quite sharply with more tonnage availability thus the Howe Robinson weekly index assessment for a Tess 58 from South Africa to Far East has fallen from around $57,000 per day (at the end of September) to around $36,000 today. Clearly any future reductions in manganese ore shipments from South Africa may put rates on this key route under downward pressure.