Indian manganese ore imports rose by over 77% to 2.73 million tonnes (mn t) in Jan-Jun’21 (H1) against 1.54 mn t recorded in the same period last year. South Africa was the largest exporter to India, at almost 1.50 mn t.
Factors that drove up manganese ore imports
The fate of the ferro alloy industry is intrinsically linked to that of the steel industry. In CY’20, the first wave of Covid and strict lockdown had reduced steel consumption to nil, which had also dragged down manganese alloys demand. There were also supply issues from South Africa which too was in the throes of Covid.
- However, in H1CY’21, manganese alloys prices started scaling news highs, which encouraged several producers of other ferro alloys to migrate to manufacturing manganese alloys since it offered very lucrative margins at such high prices.
- Also, there were supply issues in the international markets that supported increased demand from India. Supply disruptions from Ukraine, which traditionally supplies to Europe, led to India catering to Europe. Malaysia too faltered in terms of supplies, because of strict lockdown. This led to South East Asia and Japan, which are serviced by Malaysia, sourcing from India as well, at very high prices. Consequently, because of higher demand for manganese alloys, demand for manganese ore increased.
- Imports were also aided by the fact that there was not much change in the domestic supply of manganese ore. Traditionally, domestic production of manganese ore is around 2.5 mn t, with imports at similar levels. However, the H1CY’21 import trend is an aberration, SteelMint observes.
Outlook
Indian steel demand is expected to recover post-monsoon. Consequently, domestic demand for manganese alloys is also expected to rise in tandem.
Secondly, demand from the export markets may also stay buoyant with the implementation of the Russian export tax which will create a case for the Russians to exit the export market from Aug’21. The markets vacated by Russia can be catered to by Indian smelters.
Thirdly, a possible export duty from China could further open up markets for India.
Therefore, above factors may support higher manganese alloys supplies from India, which can further boost manganese ore imports.
India is the largest and cheapest supplier of manganese alloys globally.
Prices as on 9:00 IST, 21 Jul. d-o-d changes indicated against closing price of 20 July
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