The manganese alloys markets continued to come under pressure last week amid weakening steel demand.

A series of tenders for standard ferromanganese revealed that numbers have dropped further, although exact details were sketchy. Market participants said that one steel mill had paid around $530 a long ton on an in-warehouse basis. A second mill also was in the market, and sources said that although awards hadn't officially been made it was anticipated that numbers would be in a similar range.

In-warehouse prices are typically $10 below delivered numbers, market participants said.
Traders said that at least one of the tenders was won by a South African producer which has a longstanding relationship with the mill. The strengthening of the dollar and, therefore, slight weakening of the South African rand probably helped contribute to the aggressive numbers, sources said.

"There's a little bit of a benefit for the South Africans on currency right now, so they (the South African producer) probably figures they'll take advantage--especially if they think prices will go lower," another trader said.

How low prices could go is unclear. "The producers are moaning about prices getting to below costs of production, but no one wants to take production out," one source said.

Market participants said that while traditionally $450 a long ton has been seen as the level where producers start to worry, that number might now be closer to $500. "It's different than a few years ago because costs like energy and coke are so much higher," one market participant said.

Meanwhile, silicomanganese also is under pressure and is said to be headed toward 30 cents a pound. Most sources put prices in the 30- to 32-cent-a-pound range.