India: Manganese ore imports expected to surge over 40% in FY’22

India’s imports of manganese ore stood at 5.70 million tonnes (mnt) in FY’22 (up to Feb’22) and total imports in the recently-concluded fiscal are estimated to reach 6.2-6.3 mnt. Imports are expected to surge sharply by 43.85% year-on-year compared with 4.31 mnt in FY’21 mainly on higher export demand for manganese alloys amid firm global steel prices, SteelMint notes.

The major importers were Oswal Minerals Limited at 0.69 mnt, Rajadhiraj Tirupani Vinayak Natraj Private Limited at 0.33 mnt and Shyam Ferro Alloys Limited at 0.300 mnt. India’s steel production surged 14% in FY’22 and, therefore, demand from domestic alloys producers also remained strong.

Moreover, export demand for higher alloys grades led to imports of high-grade manganese ore as domestic availability of high grades continues to remain constrained.

Factors driving imports

Manganese alloys producers in India operated at high capacity as a result of higher orders received from the domestic and export markets.

• Strong export demand and high prices of manganese alloys led to Indian producers placing extra orders this fiscal year. Chinese production was affected due to the government’s ‘Dual Control Policy’. In response, China’s manganese alloys buying interest shifted to India and ore imports increased.
  
• Lockdown of Malaysian plants resulted in decline in production offering Indian buyers the opportunity to grab bulk orders from seaborne buyers who depend on Malaysian manganese alloys.
• Domestic manganese ore production stood at around 2.097 mnt in FY’22 (up to Feb’22). Imports increased considerably in FY’22 as domestic demand, expectedly, outpaced supply.
• Manganese alloys prices reached new highs during Q3FY’22, which led some manufacturers of other ferro alloys to shift to manufacturing manganese alloys since it promised lucrative margins. This, in turn, boosted imports.
• Supply issues in the international markets supported increased demand from India. Supply disruptions in Ukraine due to the ongoing war led to increased reliance on India. Ukraine, traditionally, meets Europe’s demand for manganese alloys. Consequently, because of higher demand for manganese alloys, demand for manganese ore increased.

Leading suppliers

Imports from South Africa up 41%: South Africa continued to remain the largest exporter of manganese ore to India at 3.07 mnt in FY’22. Imports from South Africa rose sharply by 41% y-o-y from 2.18 mnt in FY’21. However, unrest in that country in Jul’21 affected imports in Q2FY’22 but all-time high prices of manganese alloys in line with good demand in Q3FY’22 led to increased demand of manganese ore from South Africa.

Imports from Gabon rise by 86%: Gabonese manganese ore imports surged by 86% y-o-y at 1.56 mnt in CY’21. Strong export demand for high-grade silico manganese led to increased demand for Gabonese manganese blocks from domestic alloys producers.

Imports from Australia edge down: India imported 0.56 mnt of manganese ore from Australia in FY’22 – 5% y-o-y compared with 0.67 mnt in FY’21. Container shortage and high freight costs impacted Australian imports during the just-concluded fiscal.

Imports from Cote D Ivoire climb 76%: Imports of manganese ore from Cote D Ivoire rose by a whopping 76% y-o-y to 0.16 mnt from 90,000 t in FY’21.