India: Imported manganese ore prices near to lowest in the year

Seaborne manganese ore prices escalated in May owing to supply shortage. However, the prices started falling since last month as the Chinese demand gradually evaporated with higher inventory levels at their ports. Current inventory levels at the Chinese ports are above 5 mn t which is much higher than the normal levels, due to non-acceptance of high ore prices. Thus, the global manganese ore miners are forced to reduce the prices gradually to lower levels.

Key Price drivers:

• Higher Chinese manganese ore port stock
  
  
• South African logistics improved
  
  
• Silico Manganese market dull
  
  

Chinese manganese ore inventory:
Normally the Chinese inventory decides the prices of seaborne manganese ores. However, in the past few months, that has not been the case as the prices of ores were higher during May when the inventory was above 5mnt at Chinese ports. Nevertheless, the hike in prices of ores was unrealistic and was bound to come down as logistics improved.

Price Assessments:
Currently, the price of South African carbonate ore is at around $4.15/dmtu CNF India which is near to March levels of $4.05/dmtu CNF India, lowest in 2020 amidst poor demand. Market participants believe that the prices of manganese ore might fall further as the Chinese demand continues to remain low. The price for South African manganese ore is currently down by 11% M-o-M. Current assessments are at:

• Lumps, Mn 37.5% South Africa: $ 4.15/dmtu (-20 cents W-o-W; -12% M-o-M)
  
  
• Lumps, Mn 44% Fe 5%, Gabon: $ 4.60/dmtu (-15 cents W-o-W; -8% M-o-M)
  
  
• Lumps, Mn 46% Fe 5%, Australia: $ 5.0/dmtu (-10 cents W-o-W; -7% M-o-M)
  
  

Silico manganese demand dull:
Silico manganese prices are going down gradually in line with reduced demand in the global market. The steel market is still lacklustre and the ore prices are also falling, which is having a cascading effect on the alloy prices. Buyers are in a wait-and-watch mode as they firmly believe that the prices will come down further.

Future Outlook:
It is expected that manganese ore prices may fall further in line with the down-trending manganese alloys market. However, the Chinese market would play a crucial role in further price adjustments.