KUCHING: OM Materials (Sarawak) Sdn Bhd’s (OM Sarawak) ferroalloy smelting plant in Samalaju Industrial Park, Bintulu has reported double-digit increase in the production volume of ferrosilicon (FeSi) and manganese alloys in the July-September 2023 quarter (3Q2023).
For the quarter under review, OM Sarawak’s FeSi production surged by 31.5 per cent or 9,405 tonnes to 39,296 tonnes as compared to 29,891 tonnes in the April-June 2023 quarter (2Q2023).
As at Sept 30, 2023, 15 out of the 16 furnaces at the smelting plant were in operation, with seven furnaces (consisting of five FeSi furnaces and two silicon metal furnaces) producing FeSi and eight furnaces producing manganese alloys. The remaining one FeSi furnace was shut down for scheduled major maintenance.
In the current quarter, both silicon metal furnaces were producing FeSi temporarily, said OM Holdings Ltd (OMH), owner of OM Sarawak, in its quarterly production and market update.
“Production volumes for manganese alloys increased by 22.8% ( to 86,934 tonnes from 70,776 tonnes in 2Q2023) following the commencement of production for one manganese alloy furnace at the end of June 2023 following the completion of major maintenance works.
“In addition, in response to the growing market demand for HCFeMn (high-carbon ferromanganese), more production capacity was allocated to produce HCFeMn (a product with higher daily output) compared to the previous quarter, which also contributed to the increase in production volumes,” said OMH.
In 3Q2023, OM Sarawak recorded lower production output of manganese sinter ore of 38,832 tonnes as compared to 42,230 tonnes in 2Q2023.
In the first nine months of 2023 (9M2023), OM Sarawak recorded FeSi production volume of 98,894 tonnes, manganese alloys production volume of 209,861 tonnes and manganese sinter ore of 111,174 tonnes.
In 3Q2023, OM Sarawak reported a 16.2 per cent increase in sales volumes for FeSi to 34,353 tonnes (2Q2023: 29,565 tonnes) while the sales volume of manganese alloys grew 4.7 per cent to 67,586 tonnes (64,573 tonnes) in line with increase in production volumes.
The production of manganese sinter ore is mainly for internal consumption, with a small volume of 1,625 tonnes sold in the current quarter under review.
As at Sept 30, 2023, OMH said all eight manganese alloys furnaces have successfully completed major maintenance. Of the six FeSi furnaces, two have completed major maintenance while one furnace underwent major maintenance during the reporting period. For the remaining three FeSi furnaces, one is scheduled to commence major maintenance in 4Q2023 while the other two is scheduled for 2025 after further assessment on the furnace condition.
“For the silicon metal conversion project, fabrication works are on-going to address the issues which arose during the hot commissioning phase. In the interim, both silicon metal furnaces have been switched to produce FeSi to increase productivity.
“The hot commissioning of the 2 furnaces for the production of silicon metal is anticipated to restart in 1Q2024,” said OMH, which is dual listed on Australian Securities Exchange and Bursa Malaysia.
During the current quarter, OM Sarawak repaid US$9.3 million in loans to project finance lenders.
In a marketing and trading update, OMH said in 3Q2023, the company transacted a total of 604,157 tonnes of ores and alloys (including inter-company sales), which represented a 22.5 per cent quarter-on-quarter increase from 2Q2023.
According to the International Manganese Institute, world crude steel production during July and August 2023 was 319.4 tonnes, which represented an increase of 2.4 per cent as compared to the same corresponding period in 2022.
Fastmarkets MB reported that the price of 44% Mn ore closed at US$4.37/dmtu CIF China at the end of September 2023, a decrease of 3.7% from US$4.54/dmtu CIF China at the end of June 2023.
During the quarter ended Sept 30, 2023, OMH said FeSi price decreased marginally from US$1,400 to US$1,360 per tonne CIF Japan while siliconmanganese (SiMn) price increased marginally from US$935 to US$945 per tonne CIF Japan. The market has been relatively stable during the current quarter.
Freight rates increased in the current quarter as compared to the preceding quarter, with Fastmarkets MB reporting an implied freight of US$0.80/dmtu from South Africa to China for 37% manganese ore as compared to US$0.66/dmtu at the end of June 2023.
