India: Imported manganese ore prices surge as high grade availability tightens

• Weekly cargo arrival drop on logistics issues
  
  
• Indian smelters fear further hikes, stock up
  
  

Imported manganese ore prices witnessed a notable upward revision this week. In fact, ore prices reached a 1.5-year high for all the regions, registering an increase of 14-22% w-o-w. This substantial price movement signified potential tightening in the global manganese ore market.

Australian high-grade ore: Australian high-grade manganese ore (46%) experienced an increase of $1.15/dmtu to settle at $6.5/dmtu. In the third quarter of financial year 2024 (Q3FY24), South32's manganese ore production from Australia fell by 18% to 0.645 wmnt as they temporarily suspended operations due to the impacts of tropical cyclone Megan. This supply constraint, coupled with rising inquiries from India and Chinese buyers, have contributed to the upward price movement.

Gabonese high-grade ore: Prices of Gabonese high-grade manganese ore (44%) have jumped $1/dmtu to $6/dmtu, driven by rising production costs, limited global supply (including Australian export disruptions), and surging Indian demand for high-grade ore. A recent deal for 3,000 tonnes (t) of Gabonese lumps (Mn 44%) was sealed at $5.5/dmtu, up by $0.50/dmtu.

Gabon's manganese ore production surged 76% y-o-y in Q1 2024, reaching 1.9 million tonnes (mnt). However, railroad maintenance is limiting export growth, with transported and sales volumes rising at a more modest pace of 21% and 27%, respectively.

South African lumps rise: In contrast, South African lumps Mn37% grade increased this week by $0.60/dmtu to $4.95/dmtu. This suggests a potential for upward price momentum, as Indian smelters started booking manganese ore amid concerns of further price rise and to stock up amid declining inventory at hand.

Key drivers:

Declining inventories of manganese ore: Dwindling high-grade spot ore inventories within India are prompting a strategic shift towards imported resources. This development is stimulating renewed activity in prominent manganese ore producing regions such as Australia (upon resumption of production) and Gabon.

Reduced cargo arrivals w-o-w: While total manganese ore cargo arrivals to India have decreased by 56% (encompassing Mn37%, Mn44%, and Mn46% grades), weekly shipments have dipped to 49,750 t between 10-16 April, 2024, compared to 114,005 t in the preceding week. This data showed potential logistical challenges further exacerbating the immediate supply tightness.

These prevailing market dynamics indicate a potential for sustained price increases for manganese ore in the near term. Close monitoring of evolving production levels in major producing regions, and import activity in key consumer countries will be essential for accurately gauging the long-term direction of manganese ore prices.