Imported Manganese ore prices escalated from South Africa as soon as the lockdown was imposed in the country. As the prices from South Africa escalated due to closure of mines and delayed shipments, the prices from other countries also surged in the coming weeks. The prices increased by approximately 50% as compared to the prices of pre-lockdown levels. Meanwhile, the Chinese market opened and the interest in buying Manganese ore grew stronger, which supported a further rise in prices. However, now the situation is easing up and regular supply has resumed and hence the prices are falling again.
Prices for Seaborne Manganese Ore July Shipments (CNF India):
• Lumps, Mn 37.5% South Africa: USD 5.35/dmtu (-75 cents W-o-W)
• Lumps, Mn 44% Fe 5%, Gabon: USD 5.7/dmtu (-55 cents W-o-W)
• Lumps, Mn 46% Fe 5%, Australia: USD 6.1/dmtu (-60 cents W-o-W)
One of the major producers of Silico Manganese in India shared with SteelMint that the fall in prices of Manganese ore was quite expected as no one would have booked ores at such high prices especially when the demand of Manganese alloys are dull and the prices are down-trending, therefore, it can be said that the prices are merely correcting itself.
Producers of Manganese alloys in India are aware that if the prices fall a little more, it might get cheaper than the domestic Manganese ore. In addition to this, due to the work restrictions in the mines in India, most of the mines are not operating with full capacity, and therefore, not much material is there to offer. With the monsoons approaching, production will be affected in the coming month as well.
South African Exports to India
In the graph below it can be seen that the exports quantity significantly dropped by 66%in Apr’20 as the prices started to rise and the logistics issue got severe. The demand has been slow since end of March as the lockdown hit the market and the Ferro Alloys plants shut down, which prolonged the inventory by further one month. However, even after the lockdown, many Manganese Alloys plants are not operating at low capacity due to down-trending Manganese alloys market and the falling prices. Thus, the producers are refraining themselves from procuring any raw material for the time being as the prices are correcting aggressively.
Future Outlook
It is expected that the ore prices may fall further in line with the down-trending alloys market and the buyers are likely to defer their procurement for later.
Leave a Reply