Increased availability of
Manganese (Mn) ore combined with subdued steel consumption has put pressure on
the Mn ore prices. Manganese ore prices have gradually slumped by over 40.0%
since January 2011 on the back of oversupply in global markets. MOIL has
further lowered its prices by 5-20% for various grades for Jan-March 2012
period. It announced a price cut of 5-15% in ferro grade, 12% in silico grade
& 20% in fines for Q4 FY12.
Lower realization and inferior
product mix is said to keep MOIL under pressure in the fourth quarter of fiscal year 2012. However, the management feels the prices should stabilize post FY 12.
MOIL's Mn Ore realizations stood
at Rs7,993/Tn(down by approx. 2% q-o-q). Production for 9 months ending Dec
2011 was around 755,363 tonnes (2,85,100 MT for the 3rd quarter).Inventory
stands at 149,000 tonnes. The decline in realization was due to price cut and
extraction of low grade of ore.
However, as per the management,
the production growth of Mn Ore in India is 22% and globally it is even more at
around 33%. The company expects the volumes to be higher for the remaining
quarter of FY 12 as they have made available 450,000 tonnes. 138,000 tonne are
ferro grade out of the above.
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