India: Silico manganese export offers rebound as imported ore prices surge 18% w-o-w

• High-grade manganese ore supply tightens
  
  
• Cost of production rises for manganese alloys
  
  

Indian silico manganese exports offers were up $58/tonne (t) this week. Rising imported ore costs and domestic supply tightness (delays, low inventories) are driving the surge. Exporters cautiously navigate this opportunity amid potential global demand shifts and ongoing supply chain disruptions.

According to BigMint's assessments on 3 June 2024, the 60-14 grade was assessed at $1,121/t FOB, increasing by $53/t w-o-w, and the 65-16 grade was at $1,238/t FOB, up $58/t w-o-w. Furthermore, some major producers in Vizag and Raipur were offering SiMn 65-16 grade ex-Vizag/Haldia at an FOB of $1,240-$1,250/t, on the back of the surge in high grade imported and domestic manganese ore prices. This also led to limited supply in high-grade manganese ore.

Factors supporting price hike

High-grade manganese ore supply tightens, prices surge: The high-grade manganese ore market is experiencing a period of pronounced supply constraints, leading to escalating prices for Indian importers. Concerns regarding global supply are exacerbated by a recent production halt at South 32, a major Australian miner. This disruption is contributing to the tight supply situation and pushing asking prices higher, particularly for immediate deliveries to India.

One of the key importers from Durgapur informed BigMint that imported ore, specially Gabonese grade 44%, is expected to rise by more than $10-12/dmtu CNF India in the near term.

In fact, Indian importers are encountering record-high prices of imported high-grade ore. These have already seen a hike of $1.3-$1.4/dmtu. Overall, ore prices have risen by up to 18% w-o-w.

Manganese alloys production costs spurt: The soaring import prices of high-grade ore (over $1.3-$1.4/dmtu) have translated into an estimated cost increase of INR 9,000-12,000/t ($108-144/t) for high-grade manganese alloys in India. This has resulted in limited immediate availability of these alloys, with potential delivery delays extending into July for new orders.

Demand surge from China: A significant increase in inquiries for high-grade ore from China, coinciding with limited domestic availability, has placed additional pressure on global supply chains, impacting deliveries to Indian ports.

China silico manganese market robust: Chinese silico manganese prices rose by RMB 650/t ($14/t) despite mixed sentiments. Spot prices (60-14 grade) were at around RMB 8,500/t-8,700/t ($1,174-1,201/t) ex-works, reflecting strong manganese ore market support. This trend is impacting the Indian manganese alloys market as well.

Outlook

Soaring global and domestic manganese ore prices are casting a shadow on the near-term outlook for Indian silico manganese exports. While a price increase in silico manganese exports appears likely, the long-term impact on the Indian market remains uncertain.

A key importer from Durgapur informed BigMint that it expects import prices of Gabonese manganese ore (grade 44%) to climb above $10-12/dmtu CNF India in the near future. This likely increase in raw material costs is likely to significantly elevate production costs of high-grade manganese alloys.