· Production output for the quarter ended 30 June 2022 was 35,004 tonnes of ferrosilicon (“FeSi”), 60,767 tonnes of manganese alloys (included silicomanganese (“SiMn”) and high carbon ferromanganese (“HCFeMn”)) and 30,446 tonnes of manganese sinter ore

 

· A total of 37,779 tonnes of FeSi and 52,172 tonnes of manganese alloys were sold during the quarter ended 30 June 2022

 

· Major scheduled maintenance works commenced in June 2022, beginning with manganese alloy furnaces, followed by FeSi furnaces

 

· Two furnaces to be converted to the production of manganese alloys have commenced hot commissioning and performance testing on 27 June and 25 July respectively

 

· 422,380 tonnes of ores and alloys were transacted in the period from 1 April 2022 to 30 June 2022 as compared to 405,269 tonnes from 1 January 2022 to 31 March 2022, which represented a quarter-on-quarter increase of 4.2%

 

· World crude steel production during March and April 2022 was 334.2 million tonnes, which represented a 6.4% decrease as compared to the same period in 2021, due to a continued slowdown in Chinese steel production

 

· Price of 44% Mn ore closed lower at US$7.27/dmtu CIF China at the end of June 2022, a decrease of approximately 6.8%, from US$7.80/dmtu CIF China at the end of March 2022

 

· FeSi price decreased from US$2,225 to close at US$1,925 per metric tonne CIF Japan and SiMn price decreased from US$1,775 to close at US$1,225 per metric tonne CIF Japan at the end of June 2022

 

OM Sarawak owns a Ferroalloy Smelting Plant in the Samalaju Industrial Park in Sarawak, Malaysia (the “Plant”). The Plant consists of 8 main workshops with a total of 16 units of 25.5 MVA furnaces, of which 6 units are allocated for the production of FeSi, 8 units for manganese alloys and 2 units for silicon metal which are currently undergoing conversion works. The Plant will have a design capacity to produce approximately 120,000 to 126,000 tonnes of FeSi, 333,000 to 400,000 tonnes of manganese alloys and 21,000 to 24,500 tonnes of silicon metal per annum upon completion of the conversion works. The Plant also consists of a sinter plant that has a design capacity to produce 250,000 tonnes of sinter ore per annum.

 

As at 30 June 2022, 12 out of 16 furnaces were in operation with 6 furnaces producing FeSi and 6 furnaces producing manganese alloys. Of the remaining 4 furnaces, 1 furnace is undergoing conversion to produce manganese alloys (“FeSi - Manganese Alloys Conversion Project”), 1 furnace is undergoing scheduled major maintenance and another 2 furnaces are undergoing conversion to produce silicon metal (“FeSi – Silicon Metal Conversion Project”).

 

For the quarter ended 30 June 2022, production volumes for FeSi and manganese alloys increased by 3.2% and 0.4% respectively.

 

For the quarter ended 30 June 2022, sales volumes for FeSi increased by 23.0%, and manganese alloys decreased by 9.5% as compared to the previous quarter ended 31 March 2022. The increase of FeSi sales volume was mainly attributed to delayed shipments at the end of March 2022 which were carried forward to Q2 2022.

 

Major scheduled maintenance works commenced in June 2022, beginning with manganese alloy furnaces, followed by FeSi furnaces. The furnaces scheduled for major maintenance will be shut down in stages, to minimise disruptions to ongoing operations.

 

Two furnaces to be converted to the production of manganese alloys have commenced hot commissioning and performance testing on 27 June and 25 July respectively. For the FeSi - Silicon Metal Conversion Project, demolition works were completed and civil modification works are ongoing. The smelter equipment fabrication has been completed and delivered to the Plant in batches for installation. Barring any unforeseen circumstances, hot commissioning and testing works are expected to occur in December 2022.

 

During the quarter ended 30 June 2022, a total of 422,380 tonnes of ores and alloys were transacted, which represented a 4.2% quarter-on-quarter increase compared to the previous quarter ended 31 March 2022.

 

According to the International Manganese Institute (IMnI), world crude steel production during April and May 2022 was 334.2 million tonnes, which represented a decrease of 6.4% as compared to the same corresponding period in 2021, mainly due to the continued slowdown in Chinese steel production.

 

Fastmarkets MB reported that the price of 44% Mn ore closed lower at US$7.27/dmtu CIF China at the end of June 2022, a decrease of 6.8% from US$7.80/dmtu CIF China at the end of March 2022. 

 

FeSi price decreased from US$2,225 to close at US$1,925 per metric tonne CIF Japan, while SiMn price decreased from US$1,775 to close at US$1,225 per metric tonne CIF Japan at the end of June 2022. The price decrease during the quarter was mainly driven by reduced demand from steel mills amid higher energy costs and a weaker global steel market.

 

Freight rates continued to increase during the quarter ended 30 June 2022, with Fastmarkets MB reporting an implied freight of US$1.51/dmtu from South Africa to China for 37% manganese ore, compared to US$1.41/dmtu at the end of March 2022.