Indian Manganese Ore Imports Up By 59%; What Is Driving It?

According to data, Manganese Ore imports by India have already risen to 1.67 MnT in CY17 (Jan-Aug), which has already surpassed total imports in 2016. During the same period of the corresponding year, imports were recorded at 1.19 MnT, lower by around 59% Y-o-Y.

What is driving higher imports?

Considering a boost in Indian steel industry during the first half of 2017, the demand for Manganese alloys marched northwards. Therefore, a huge demand for alloy has led the producers to import the Manganese ore to fulfill their requirement.

Elevated Manganese ore imports can also be attributed to increasing demand for Indian Manganese Alloys in both domestic and foreign markets.

Moreover, the decision by the Andhra Pradesh Govt. to supply power to the Ferro Alloy units on subsidy went a long way in reviving the industry. These Ferro Alloy plants in Vizag depend mostly on imported Manganese Ore, being close to the port and sell the Manganese Alloy they produce in the overseas markets as well. Power, being the major cost component of Ferro Alloy production, has encouraged the producers to resume their operation in the region, resulting in the added requirement of imported Manganese Ore.

In view of the present scenario, demand for imported ore is firm and SteelMint expects the Indian Manganese Ore imports to surpass 2.8 MnT in 2017.

Indian Domestic Manganese Ore Production

Indian manganese ore production has risen in CY17 (Jan-Jul) on account of higher off-take and healthy demand from manganese alloy manufacturers, who enjoyed higher margins.

Though, India relies heavily on the high grade imported Manganese Ore but is also the sixth largest producer of the commodity.

Indian Manganese Ore production in Jan-Jul'17 is assessed to be at 1.56 MnT against 1.25 MnT during Jan-Jul'16, indicating a growth of 25% Y-o-Y. Production of Manganese ore increased in India owing to the lifting of mining restrictions in Karnataka & Odisha earlier in CY17.

Moreover, Indian Manganese Ore production in CY17 is also higher on account of reduced availability of the ore, with robust demand from China for seaborne manganese ore and most global miners diverting their supplies to China thereby creating domestic Ore demand in India amid reduced supply of imported Ore.

Has Indian Manganese Alloy Exports Increased and how does it impact Manganese Ore Imports?

India is one of the prominent exporters of Manganese Alloys. India exported 0.44 MnT Silico Manganese in Jan-Jul'17 against 0.34 MnT in Jan-Jul'16, registering an increase of around 30% Y-o-Y. On the other hand, India exported 0.11 MnT Ferro Manganese in Jan-Jul'17 against 0.08 MnT in Jan-Jul'16.

Japan serves as the major market for Indian high-grade Silico Manganese, accounting for 13% of the total exports, followed by Italy and Taiwan. Meanwhile, Iran could be referred to as the emerging market for Indian Manganese Alloys as it aims to fulfill its goal to become the 6th largest steel producing country. Europe also relies heavily on Silico Manganese import from India.

The export market demands for higher grade Manganese Alloys. To produce Ferro Manganese and the most in demand 65 grade Silico Manganese, both require high-grade Manganese Ore, for which India relies heavily on imports.