India: MOIL Further Cuts Prices by 5-15%

Manganese Ore India Ltd (MOIL) cuts ore prices by 5-15% effective from 1 Nov’15.

The manganese ore market outlook is dull as demand slowed further on weak steel and manganese alloys markets. Taking stock of the market situation MOIL has reduced prices for Ferro Grade by 15% and Silico Grade 5%, effective from 1 Nov’15. Earlier in Oct’15 MOIL had cut prices of various grades by 3-10% , the prices of all Ferro Grades of ore (expect Fines) have been reduced by 3% , Silico grade prices have been reduced by 5-10% while the prices of Manganese Ore Fines have been reduced by 5%.

The manganese alloy export market is under pressure due to the New Foreign Trade Policy which has reduced export incentive given to Indian ferro alloy industry. Indian Ferro Alloy exporters used to get an incentive of 4% under Focus Product Scheme and a duty drawback of 1.4% , which was reduced to 2% under MEIS and 1.4% Duty Draw Back, based on category of the country, w.e.f 1 Apr, 2015. Domestic manganese alloy market is already bearish for many months which have created a supply overhang. Manganese ore prices have been under pressure as demand for manganese ore continues to be sluggish on the back of poor demand for manganese alloys. MOIL has also experienced low off take and rising inventories of manganese ore, prompting MOIL to cut prices further. Also, imported manganese ore prices have been consistently tumbling, and this has exerted further pressure on MOIL in readjusting its prices.

Global Manganese Ore Prices Continue to Drift Lower

Australian manganese ore grade 46% is being offered at around USD 2.5 /DMTU CIF India. Price for 36-37% South-African Carbonated Ore has also come down, and is being offered by BHP at USD 2.2/DMTU CIF India for November, and USD 2/DMTU for December shipment. Chinese demand for imported manganese ore has also come down sharply and lot of Indian ferro alloy plants are operating at very low capacity and some of them are completely shut down because of the weak demand and low prices in the market. Eramet, Gabon has also reduced its price, and is offering 44% grade at USD 2.4/DMTU CIF India.