Low Demand continues to pressure Imported Manganese Ore Market

Bearishness continued to rule the imported Manganese ore market. Prices are likely to be constrained due to lagging demand.

Demand for Manganese ore continues to be sluggish on the backdrop of poor demand for Manganese alloys. The Manganese ore market is still finding it difficult to sustain at current price levels. BHP has reduced its South African Semi Carbonate Manganese ore prices (Mn 37%) from USD 2.8/DMTU, CIF India. However, BHP Australia is offering its high grade (Mn 46%) Manganese ore at USD 3.3/DMTU, CIF India as Chinese demand for imported Manganese ore has continued to come down sharply. As a result, miners are under pressure to reduce the prices for High grade Manganese ore.

Prices of imported Manganese ore are under pressure and likely to come down further if the lack of demand persists. The stock level of Manganese ore with Ferro alloy smelters is still low and nobody is willing to take long positions unless there is clarity in the direction of Manganese alloys market. All the shipments, which are scheduled to arrive at Indian ports, were booked at previous high prices and the Manganese alloys production cost will still be under pressure due to this.

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 high cost of production.

Imported Manganese ore prices will continue to be under pressure at least for the time being.

Domestic Manganese Ore Market

Domestic offers in Balaghat for Manganese have been lowered by the private miners, in line with the lackluster market for Manganese alloys, with fewer deals have been concluded. Prices have gone down as earlier in this month, Manganese Ore India (MOIL), the country’s largest and government owned Manganese ore producer, has cut prices of various grades by 10-25% for the quarter April-June, 2015. Prices have been cut on backdrop of falling Manganese alloys prices in Indian and global market. Last quarter, MOIL had cut prices by 5-7.5%.

SteelMint assessed the current offer in Balaghat for 30-32% grade is INR 5,750/MT; 34-36% is INR 6,750/MT, 40-42%- is INR 8,500/MT and 42-44% is INR 9,100/MT. Prices mentioned are inclusive of Royalty and excluding Taxes.

Mangilall Rungta mines is Odisha currently offering Manganese ore of 26-28% grade at INR 5,000; 28-30% at IINR 5,500/MT; 30-32% at INR 6,000/MT; 32-34% at INR 6,500/MT and 34-36% at INR 7,250/ MT.

The Manganese ore market is quiet for almost months as dull steel market holds the manganese alloys purchasers reluctant to purchase the material. Although, a private miner in Balaghat reported that Manganese ore prices are likely to increase in the month of May as power tariff in Madhya Pradesh will increase. The power tariff is expected to be hiked by 19% in the month of May.

 Manganese Ore Imports between 11-20 Apr’15

Note: This material was approximately booked 2 months earlier.

Exchange Rate : USD 1 = INR 63.5