India’s manganese ore imports normalise in Nov. What to expect in short term?

• Price drop in Oct encourages bookings
• Higher silico manganese exports also contribute to import volumes
• Ore prices may see uptrend in short term 

Morning Brief: India’s imports of manganese ore returned to normal levels in November 2022. Volumes last month rose by a whopping 239% to 0.395 million tonnes (mnt) compared to 0.106 mnt reported in October, 2022, as per data maintained with SteelMint but the spurt helped to normalize the volumes from the abysmally low levels seen in October. 

Factors that pulled up manganese ore imports in Nov  

Drop in imported manganese ore prices: It may be recalled that in June-August, 2022, manganese ore import prices were on the higher side, ranging from $7-8/dmtu. As a result, importers showed less interest in purchasing large quantities during that period. However, prices dropped, starting October, to hover at around $5/dmtu levels, which encouraged importers to take advantage of the price drops, and place larger bulk orders with the exporting countries. 

Low inventories: Low inventories also contributed to an increase in domestic manganese ore imports in November, 2022. In this month, manganese alloy smelters were incidentally running at full capacity, which subsequently led to inventory depletion and an increase in requirement.

Supply-demand mismatch: The selling pressure on ore producers from South Africa increased as a result of the strike in that country. Even though the strike has been partially withdrawn, and shipments have picked up somewhat, prices in October remained depressed due to low demand. The steel market in India was subdued with crude steel production down 1% in November m-o-m, squeezing end-users’ margins. However, due to low port inventories and the possibility of import prices rising in the short term, buyers wasted no time in booking the material at lower prices, inflating November volumes in the process. 

India’s silico manganese exports up: Silico manganese export trends heavily influence imports of manganese ore. Exports in April-November, 2022 increased by 23% to 0.725 mnt from 0.590 mnt y-o-y in the same period last fiscal. Turkey was a big importer in November, with 0.079 mnt, up 309%. Japan imported 0.075 mnt, up 3%, and the UAE at 0.068 mnt, was up 24%. Smelters, consequently, booked good volumes of manganese ore imports, especially since they expected prices to rise subsequently.

Leading suppliers in November 2022 

• Imports from South Africa return to normal levels as strike lifts partially: Although the strike has been partially withdrawn, and shipments have picked up a bit, prices in October remained depressed because of low demand, and export volume decreased by 28% to 1.21 mnt from September 2022. However, South Africa continued to remain the largest exporter of manganese ore to India. Volumes increased sharply to 0.258 mnt in this month against 0.012 mnt in October. However, imports from South Africa were down 21% y-o-y to 3.16 mnt in April-November, 2022. South African manganese ore was offered at around $4/dmtu for October shipment, down by $0.55/dmtu m-o-m from September. Prices were decreased by miners to boost export volumes.
• Imports from Gabon rise 120%: Gabonese manganese ore imports increased by 120% to 0.097 mnt in November against 0.044 mnt in October. An increase in export demand for high-grade silico manganese led to a decrease in prices for Gabonese ore. Gabonese manganese ore was offered at around $4.7/dmtu for October shipment, down $0.8/dmtu m-o-m from September.
• Imports from Brazil down 61%: India’s imports of manganese ore from Brazil were down 61% to 0.003 mnt in November against 0.008 mnt in October.
• Imports from Zambia down 141%: India’s imports from Zambia were sharply down by 141% to 0.075 mnt last month in comparison to the previous month. 

Outlook 

Market prices of manganese are slowly recovering. The manganese ore market is expected to remain on an uptrend in the near future since index prices of the material have increased due to rise in electricity tariffs and material handling costs.  

But manganese alloys demand may need to be watched closely. Global steel prices are rising as demand is seen limping back from Europe and this could spell good news for the manganese alloys segment.