Indian manganese alloy export fall 3% y-o-y in H1CY24, further declines likely
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- Weak demand in the EU, Japan weighs on exports
- Indian mills reduce silico manganese export prices
- Subdued market sentiments likely to prevail in Q2 FY25
Morning Brief: Indian manganese alloys exports were recorded at 867,000 tonnes (t) in the first half of calendar year 2024 (H1CY'24), down by 3% y-o-y, as per data available with BigMint.
Strikingly enough, India's manganese alloys exports in May, 2024 hit the lowest level since November, 2023. Manganese alloys exports in May stood at 136,000 t. Silico manganese exports in June stood at 79,000 t compared to 88,941 t in the corresponding period of last year. Ferro manganese exports, on the other hand, stood at 57,000 t in June as against 45,616 t in June, 2023.
Country-wise exports
In H1CY'24, Italy topped the chart of silico manganese importers from India with 63,102 t. Japan and Egypt came second and third among the leading importers with 63,557 t and 60, 350 t, respectively.
Factors impacting manganese alloys exports
Slow demand in EU: India's manganese alloys exports comprising silico manganese and ferro manganese edged down partially due to the downturn in the European Union's (EU's) apparent steel consumption, reflecting poor demand conditions which started back in the second quarter of calendar year 2022 (Q2CY'22). War-related disruptions and unprecedented rise in energy prices have driven production costs higher. These factors continued to play spoilsport and Indian mills felt the heat as European mills showed far less interest in imports.
Declining crude steel production in Japan: Similar to the EU, Japan's falling crude steel production also weighed on Indian mills' prospects to generate enough demand for manganese alloys in the Japanese market. Japan's crude steel output continued its downtrend in June this year, dropping by 4.2% y-o-y to 7.02 million tonnes (mnt), marking the fourth consecutive month of decline.
According to the Japan Iron and Steel Federation's (JISF) report on 22 July, production at blast furnaces has slowed due to weakening demand for steel products. Cumulative steel production in the first half of the year stood at 42.7 mnt, a 2.6% y-o-y decrease. This situation has affected important sectors of the Japanese industry including automobile, construction, infrastructure, engineering and defence.
Geopolitical turmoil in the Middle East: The UAE, the key supplier to the Middle East and North Africa (MENA) region, has also faced disruptions leading to a decline in overall import volumes. India's manganese alloys exports to the MENA region have been significantly impacted by ongoing geopolitical tensions. The Middle East produced a dismal 4.6 mnt of crude steel in June, down 2.7% y-o-y.
Ongoing instability in Bangladesh: Indian mills received very few inquiries from Bangladeshi buyers for silico manganese and ferro manganese as the country passes through a period of political instability. Amid the volatile political situation, Bangladeshi mills showed minimal interest for manganese alloys.
Crunch in container supply: Indian exporters of silico manganese, particularly the high-grade varieties, are grappling with a logistical bottleneck caused by delays in empty container allocation. An official representing an Indian mill told BigMint: "Delays are stemming from the global container crunch further exacerbated by rerouting of shipments due to Red Sea issues. The delay in securing containers is causing complications in finalising export deals, especially for high-grade silico manganese.
"Moreover, exporters face uncertainty in meeting delivery deadlines, potentially leading to contractual disputes and reputational risks. This is one of the most important factors behind the decline in exports," the official added.
Silico manganese export prices drop
Indian silico manganese export offers have witnessed a dip. Reduced port activity and competitive offers from other regions are exerting pressure. Monthly average of BigMint's assessments with silico manganese (SiMn 60:14) fell from $1120/t FoB Vizag to $885 FoB in Jul'24.
Outlook
Export volumes are likely to fall in Q2 FY25 amidst limited bookings seen in June-Aug'24. Indian silico manganese and ferro manganese export prices are expected to remain range-bound in the near-term. While a potential resurgence in demand from Europe could exert upward pressure on prices, the current market landscape, characterised by subdued domestic demand and limited export activity, is likely to impede any upward momentum.
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