Manganese ore imports have been consistently high in the current calendar, staying firmly over 0.40 million tonnes (mn t) almost throughout the year, dipping only once, in May’21, to 0.27 mn t. Volumes touched 0.61 mn t in Mar’21 and reached a little above 0.61 mn t, highest so far this year, in October, a m-o-m increase of 45% against 0.42 mn t in September.
Imports have been specifically high from Gabon (Mn44-46%) and Australia (Mn45-46%) which produce the high grade ores which are required for making 65:16 and even higher grades of silico manganese.
Why are manganese ore imports firm this year?
- Higher prices of manganese alloys led smelters to stock up on ore imports. Prices of manganese alloys (both silico manganese and ferro manganese), in fact, had been touching historic highs this year. Prices spurted because exports of both materials picked up sharply. Exports of silico manganese ranged from 62,000-95,000 tonnes till September against 24,000-75,000 t in CY’20.
- Ferro manganese exports too were significantly high, touching almost 64,000 t in July and otherwise ranging from 32,000-49,000 t compared to last year’s levels of 18,000-30,000 t, even nose-diving to 7,000 tonnes in Apr’20. Ferro manganese volumes over Jan-Sept amounted to 0.41 mn t against 0.19 mnt in the same period last year. “The entire manganese alloys market was on fire these past few months,” said a source.
- Normally manganese alloys are exported to the Middle-East, Japan, Taiwan and SE Asia. However, this year, European buyers were very active, along with USA and Canada (the latter two for ferro manganese), despite logistics costs from India being higher, because of supply issues from Brazil.
“This year, demand was especially high from European buyers who, handicapped by the natural gas crisis, were willing to pay higher to secure cargoes since supply was very tight. They habitually sourced from Russia and Ukraine but both these European countries also laboured under production cuts due to the gas issue. This led to panic buying which fuelled the silico manganese prices,” said a source.
- Moreover, Indian exporters were offering three months’ forward bookings which further pushed up prices. “In June, they were offering September shipments. There was panic buying with importers trying to secure material,” recalled an industry source. Covered till December with back-to-back bookings, exporters started importing manganese ore in increasing volumes.
- China, which does not export or import manganese alloys, acted as a catalyst this year. It showed nominal interest for Indian manganese alloys leading to panic buying by Europeans, fearing an impending supply crunch, and this catapulted prices from Indian smelters.
Chinese buying of manganese alloys started in small lots through traders, although apparent demand was higher than actual demand. Ore prices were comparatively low till August but started spiking from October as Indian exporters started building inventory for December shipments.
- Another issue was lack of vessels and high ocean freight which made traders secure as much ore as possible once a vessel became available.
The above factors are still in play although the export market has slowed down somewhat since most exporters are covered till December. Hence, the slump seen towards end-October and November. But manganese ore imports have been high in October since producers want to ensure raw material stocking to deliver orders booked till December.
Outlook
Chinese interest has waned and thus manganese ore imports may slow down in Q4CY’21 but volumes will still be on the higher side as overseas buyers may return to the market from the new calendar.
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