Indian miners cut low-grade manganese ore offers for July'24

Indian manganese ore miners have slashed their offers for July 2024 for all grades of manganese ore below 44%. However, miners have increased prices of manganese ore for grades above 44%.

MOIL, India's leading manganese ore producer, has adjusted its prices effective 1 July, 2024. Grades above 44% saw a modest 2% increase m-o-m, while lower-grade lumps prices were reduced by 8%. This marks the first price decrease in six months, following substantial hikes of approximately 40% in June and 35% in April.

Offers from key mining regions:

Madhya Pradesh: Offers from miners for all grades below 44% declined by 8-22%, while prices for higher grades witnessed an increase of 10% m-o-m. The miners have faced a major difficulty in coping up with the operations of their mines due to the varying climatic conditions, subdued market demand and labour shortage.

A mine owner stated, "We are currently stopping production due to heavy rainfall in our region. About 50% of the mines have stopped production and the rest that are functioning have withheld offers amid high market volatility. The key reason for the decline in prices is poor demand in both domestic and international markets which has affected our profit margins".

Odisha: Miners in the state have reduced their offers for grades between 30-32% by 4% m-o-m. For grades below 30%, offers inched down by 1% which also went hand-in-hand with MOIL's price announcements. A bearish market atmosphere and sluggish demand from the mills affected suppliers besides logistical issues and the reluctance of buyers to accept higher offers for low grades.

"Key miners in India anticipate price volatility for manganese ore next month as the improvement in demand can only improve market conditions. However, we have stopped offering and will probably resume in early October," another miner informed.

Visakhapatnam: The Vizag market is basically known for availability of lower grades and prices of these grades of ore (below 25%) for July have edged down by 13% on tepid demand.

A miner source told BigMint: "The situation here is pessimistic as miners are unable to sell stocks at a price which is break-even, thereby creating panic in the market. Miners need to keep an eye on changing demand patterns. However, this situation will prevail hardly for two-three more months after which the market will have a smoother run."

Factors driving high-grade ore prices:

Imported ore prices stable: In June, imported manganese ore prices showed stability with South African ore (Mn37%) maintaining $6.15/dmtu in week 3 from $6.55/dmtu in week 1, marking a 6% decrease. Australian (46%) ore held steady at $9.01/dmtu in week 3, up 1% from week 1's $9/dmtu. Gabonese (44%) ore remained unchanged at $8.45/dmtu in the first two weeks. This stability was influenced by reduced inquiries and purchases due to a sluggish export market for Indian manganese alloys.

Silico manganese prices drop: In June, Indian silico manganese prices saw a significant decline, dropping by INR 5,100/t ($61/t) to settle at INR 84,800/t ($1,016/t) for grade 60-14, marking a 6% m-o-m decrease from May's INR 89,900/t ($1,077/t) exw Raipur.

This downturn reflects subdued domestic demand despite increasing cost pressure amidst rising imported ore prices. Currently at a two-month low, these price adjustments underscore weakened confidence and operational sluggishness in the finished and semi-finished steel markets.

Outlook

BigMint forecasts that manganese ore prices in July will stay stable. Any significant increase has the potential to create instability in the ferro alloys sector.