India: Seaborne manganese ore prices lowest in 2020; expected to fall further

South Africa-origin manganese ore is trading at around $4.05/dmtu CNF India, the lowest level for 2020, amid sluggish global and Indian demand.

Market participants expect prices of manganese ore to fall further as Chinese demand remains low. At present, South African manganese ore price is down by 23% M-o-M on a cnf India basis.

Ore stocks with Indian alloy producers have shrunk though these companies are likely to hold off on fresh purchases as they expect further fall in import prices. There is also expectation that India’s state-owned MOIL would reduce prices by 10-15% to maintain price parity with imported material.

Some buyers expect prices to fall below cost levels of major global miners, which may force these to either reduce or stop production in an effort to bring supplies in line with demand.

Price Assessments:

• Lumps, Mn 37.5% South Africa: $4.05/dmtu (-10 cents W-o-W; -23% M-o-M)
• Lumps, Mn 44% Fe 5%, Gabon: $4.60/dmtu (-30 cents W-o-W; -26% M-o-M)
• Lumps, Mn 46% Fe 5%, Australia: $5.0/dmtu (-40 cents W-o-W; -26% M-o-M

Silico manganese exports market downstream:
Silico-manganese prices in the domestic market are stable for now, but may face pressure soon amid lower export prices and falling prices of manganese ores. Export prices of silico-manganese are now lower than domestic prices.

End of lockdown triggered global price decline
South African carbonate ore prices surged in April as closure of mines and logistics due to lockdown squeezed global supplies.

However, after South Africa lifted open cast mining restrictions on 1st May, miners ramped up output despite logistical bottlenecks in railways, shipping and road transport as lockdown persisted in areas severely affected with Covid infections. Higher supplies have come at a time of slow demand for carbonate ores.

China is the biggest buyer of manganese ore and the inventory at Chinese ports play a major role in determining global prices. At present, Chinese buying is dull though the inflow of manganese ore into China has increased, lifting inventories at ports to a record high of around 5.6mn t, pressuring prices.

Since demand is even more subdued than China in other ore-procuring countries, many cargoes are reported to have been redirected to China which are expected to lift inventories in China ports even further.