Indian Silico Manganese Exports Take a Major Hit in FY16

Indian silico manganese exports have fallen by over 30% in FY16 in comparison to FY15.

India exported a total of 904,448 MT in FY15 out of which 168,049 MT was exported to Japan, 123,185 MT was exported to Italy and 94,261 MT was exported to Taiwan, according to DGFT (Director General Foreign Trade).

In FY16, India exported a total of 630,352 MT out of which 104,684 MT was exported to Japan, 85,303 MT was exported to Italy and 56,591 MT was exported to Taiwan, according to DGFT (Director General Foreign Trade).

Indian Silico Manganese Exports in FY16

Reasons for Low Silico Manganese Exports in FY16

India for the last few years has been the world’s largest exporter of Silico Manganese, ahead of Ukraine. A major share of India’s exports is to South-East Asia, East Asia and Europe.

The European Union had initiated an anti-dumping proceeding concerning imports of silico-manganese originating in India. The Commission said that it has received a complaint in November 2014. The companies in EU complained that imports of silico-manganese from India are being dumped and are thereby causing material injury to the Union industry. Europe accounted to about 25% of India’s Silico Manganese Exports. However, in Jan’16 the Commission reached a conclusion and terminated proceedings without the imposition of measures as it could not establish a link between imports from India and the injury suffered by the Union industry.

High power tariff and lack of support from the government were bane of the ferro alloys units in Andhra Pradesh. A steep hike in power tariff over the past few years had forced companies to declare lockout. Ferro Alloys is a power intensive industry and the ferro alloy units had been pushed into a crisis over the last two-three years, as power tariff increased steeply in the state. This has been a major setback for the silico manganese export market in FY16 as Andhra Pradesh is one of the major hubs for Silico Manganese exports.

Currently, demand in the silico manganese export market continued to remain capped. Many Indian producers have stopped offering in the export market looking at the low prices achievable in the international markets and want to sell in the domestic market as it’s more lucrative.

Looking ahead, in FY17 the emergence of Malaysia as the new low-cost Silico Manganese producer in the world could provide stiff competition to Indian producers to strike sale contracts with foreign steelmakers in South-East Asia and other Asian countries like Japan and Taiwan. Also, a rising share of India exports of Silico Manganese had been shipped to Europe. But Indian producers will face strong competition from Ukraine, Norway and South Africa as both the South African Rand and Ukrainian Hryvnia have depreciated to a much greater degree over the same period and Indian producers could continue to face substantial challenges in the export markets.