Indian miners hike lower grade manganese ore prices for Oct 2024 deliveries

• Higher Mn ore grades see 20% cut in offers
  
  
• Demand for steel, alloys drives up ore prices
  
  

Indian manganese ore miners increased their offers for lower grades for October 2024 sales, for which there is greater demand in the country. India's leading manganese ore producer, MOIL, announced new prices, effective 1 October 2024. At MOIL, manganese ore grades above 44% will faced a price cut of 20%, while those below 44%, including SMGR and fines, see a 5% hike. It may be mentioned, in January-August, 2024, grades below 44% comprised the bulk of the imports.

Regional offer adjustments

Madhya Pradesh: Offers for manganese ore grades below 44% rose a significant 9-18%, driven by improved demand from alloy manufacturers. In contrast, prices for higher-grade ores have decreased by 21% m-o-m.

A major miner said," While demand has slightly improved, miners are still struggling to achieve profitability. With many mines resuming operations after the monsoon season, there is an expectation of price stability over the next 4-5 months, aligning with MOIL's recent price adjustments."

Odisha: Miners in Odisha raised prices for 30-32% grade manganese ore by 5% m-o-m, while rates for grades below 30% surged by 15%, reflecting MOIL's recent price adjustments. This upward trend is driven by a positive market response from domestic manganese alloy manufacturers, whose stocks had depleted.

Additionally, the accelerating pace of the steel industry has prompted these manufacturers to increase inquiries for manganese ore, further contributing to the rising demand for lower-grade ores in the market.

Visakhapatnam: The Vizag market, known for lower-grade manganese ore production, saw prices for grades below 25% increasing as many mines have resumed operations. After hitting rock bottom, these mines are now offering higher prices.

A miner from Vizag said, "While market conditions have improved, profitability remains a challenge since their costs are aligned with the prices they are quoting. Consequently, it may take a few more months for miners in the region to operate profitably."

Factors influencing manganese ore prices

Imported ore prices drop m-o-m: Monthly average prices of South African manganese ore (Mn37%) declined 5% m-o-m to $3.93/dry metric tonne unit (dmtu) in September 2024 as against $4.15/dmtu in August 2024. Similarly, Australian-origin (46%) manganese ore prices stood at $5.66/dmtu in September as against $7.85/dmtu in August, down by 28% m-o-m, while Gabonese (44%) ore was assessed at $5.3/dmtu, a decrease of 28% m-o-m.

The overall downtrend can be attributed to key global miners, such as South32, Eramet, UMK, Jupiter, and HBIS, reducing their offers for September 2024 amid weaker steel and manganese alloys demand.

Silico manganese prices drop in Sep'24: Monthly average prices of Indian silico manganese drifted down by INR 2,300/t ($27/t) in September, with the grade 60-14 falling 3% m-o-m to settle at INR 66,500/t ($794/t) compared to INR 68,800/t ($821/t) exw-Raipur in August, as per data maintained with BigMint. The decline in domestic silico manganese was driven by falling raw material prices and limited demand from domestic steel mills.

However, prices have seen positive movements in the last two weeks. In week 39 of CY'24, prices were at INR 66,400/t ($792/t) exw-Raipur as against INR 65,600/t ($783/t) in week 38 of CY'24. This upward trend is an outcome of improving steel demand in the domestic and global markets.

Subdued demand pressures manganese alloys export offers: Silico manganese (60-14) export prices witnessed a 2% m-o-m decrease of $18/t to $812/t FOB in September compared to $830/t in August. Meanwhile, silico manganese (65-16) also declined by 5% ($45/t) m-o-m to $915/t FOB India in September as against $960/t in August.

Indian silico manganese export offers dropped because of muted trade, driven by declining consumption from key importing regions such as Japan, the UAE, Bangladesh, MENA, and Europe. Export volumes witnessed a significant decline of 88% m-o-m for silico manganese (60-14), with the total traded volume going down from 3,000 t in August 2024 to only around 1,370 t in September, as per data collected by BigMint.

Billet prices stable m-o-m: Domestic billet prices were largely stable, with a marginal drop of INR 300/t ($23/t) to INR 38,200/t ($456/t) exw-Raipur in September, down from INR 38,500/t ($459/t) in August. This decline stemmed from subdued demand and operational challenges in finished and semi-finished steel markets.

Additionally, prices have seen positive movements in the last two weeks. In week 40 of CY'24, prices were at INR 41,000/t ($489/t) exw-Raipur as against INR 39,700/t ($474/t) in week 38 of CY'24. Increased demand and strong buying activity in both the semi-finished and finished steel segments, along with favourable macro-economic factors, led to a notable uptick in offerings.

Outlook

The near-term outlook for manganese ore prices remains optimistic, driven by rising demand from domestic alloy manufacturers and the steel sector. As prices recover from recent lows, miners are adjusting their offers upward, reflecting improved market dynamics.

However, profitability remains a concern as many miners still face cost challenges. With most mines resuming operations after the monsoon, further price stability is expected over the next few months.