Our client required a detailed market study of Chinese manganese demand and the various supply options to meet this demand. This involved a detailed analysis of the domestic and imported supply options, the logistics networks required for delivery, the upcoming developments in infrastructure that would impact future delivery options and costs, and a full delivered cost analysis. An assessment of government policy on the supply side was also conducted to determine possible supply constraints into China.
Chinese manganese demand was forecast using our proprietary steel production model. Drawing on our strong understanding of domestic Chinese logistics networks and structures, we built comprehensive supply option curves to each demand centre. This was then combined with production and logistics costs from the supply side to provide a delivered cost curve. We then overlaid transportation developments (and the corresponding changes in cost structures) to understand the potential impact on sourcing for Chinese manganese consumers, based on their location.
Our report clearly outlined potentially significant changes in supply patterns for manganese into China, based on developments in infrastructure networks and rapidly growing supply options in the seaborne market. The full delivered cost assessment of domestic vs imported manganese indicated the competitive threat (or opportunity) that seaborne manganese would become to local Chinese producers. This analysis helped our client to start positioning both their marketing strategy and investment approach accordingly.