Despite a rally in Manganese Alloy prices, manganese ore prices were not seeing upward movement with buyers standing on the sidelines to force prices lower
There has been a sudden surge in domestic prices of Manganese Alloys which is influenced by various factors but primarily due to the massive depreciation in the Indian Rupee, providing greater price parity in exports. However, Manganese Ore stock continues to be low with the smelters, as buyers are afraid of taking a long position with regards to imported Manganese Ore, due to the free fall in the Indian Rupee against the US Dollar. Manganese Alloys Producers are trying to use as much as domestic Manganese Ore to keep their cost of production as low as possible. Manganese Ore miners are offering much lower prices as compared to the earlier shipments. BHP is believed to have sold 37% South African Semi-Carbonate Ore at USD 4.20/DMTU CIF East-coast India, and UMK, SouthAfrica prices are expected to be even lower.
Buyers are adopting a cautious approach before taking long positions even at these prices. Smelters are expecting prices to drop lower than what is being offered at present. Imports have become almost unviable to sustain at the present cost of production on the back of a tumbling Rupee. Imported Manganese Ore prices for higher grades are also under pressure and buyers are expecting downward correction in the price. The sudden jump in the Ferro Alloys prices has definitely brought some respite for the Ferro Alloy smelters though it also leaves a big question on the sustainability of these prices.
Dynamics of the market (both export and import) are changing very fast because of massive fluctuations in the Indian Currency against the US Dollar but the near-term market outlook remains uncertain unless the currency stabilizes and volatility in currency is minimised.
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