United Manganese of Kalahari (UMK) announced its plans to reduce ore production and sales due to weakened market conditions.

South Africa stands as the largest supplier of manganese ore, specializing in mid to high-grade ores, and holds a crucial position in China's steel industry. In the year 2023, China imported 14Mt of manganese ore from South Africa, accounting for over 50% of the country’s total manganese demand. Ordinarily, ore port stocks are maintained at levels equivalent to 2 to 3 months' worth of steel production. However, the current situation reveals port stocks are structurally oversupplied and able to cover about 10 months of consumption.

As expectations for China's economic growth fell short and the construction crisis deepened, the Chinese government responded in September 2023 by implementing an economic stimulus package to propel the economy forward. A report from the China Iron and Steel Association (CISA) indicates that China's steel exports in 2023 reached a seven-year high, surpassing 90Mt. This surge in exports supported better H2 steel production levels in the country, particularly reflecting challenges in the struggling property sector and a slowdown in domestic real estate-related construction, which typically constitutes 35% to 40% of Chinese steel demand.

The increase in steel exports has led to import tariffs on Chinese steel products by several countries, including Brazil and India. China's steel demand in 2024 is projected to decrease by 1.7% compared to 2023, which if steel production levels are maintained would further add to export availability for the international market. Despite a gloomy outlook for the 2024 real estate sector, the Chinese government is expected to continue implementing stimulus policies to support this crucial industry. South African ore suppliers have relied on strong growth from China over the last two decades and will have to start facing a lower growth landscape with the structural shifts in China’s steel economy.