Indian miners reduce manganese ore offers for September 2024

• Miners reduce prices in line with MOIL's price revisions
  
  
• Weak alloy, steel demand drag manganese ore prices down
  
  

Indian manganese ore miners have reduced their offers for September 2024 across all grades. MOIL Limited, India's leading manganese ore producer, announced new prices starting 1 September, 2024. Manganese ore with grades above 44% saw a 20% price reduction, while grades below 44%, including SMGR and fines, experienced a 15% decrease.

Regional offer adjustments

Madhya Pradesh: Offers for all grades below 44% have declined sharply by 10-30%, while prices for higher grades saw a drop by 20% m-o-m. The downward trajectory from this region was an outcome of the highly volatile market conditions and waned demand. Around 20-30% miners have temporary closed their mining due to the market instability, poor climate conditions, labour shortages and subdued demand for manganese ore prevailing in the country.

Odisha: Miners in Odisha have reduced prices of 30-32% grade ores by 19% m-o-m, while rates for grades below 30% have fallen by 29%, aligning with MOIL's recent price cuts. This decline is attributed to a sluggish market and weak demand from mills. "We foresee price volatility next month due to changing demand and weather conditions," remarked a key miner.

Visakhapatnam: In the Vizag market, a hub for lower-grade manganese ore production, prices of grades below 25% have remained unchanged amid weak market conditions. Heavy rains have forced miners to halt operations, while rising power tariffs and low demand for manganese and its alloys have added to the woes.

A miner in Vizag commented, "The sluggish demand has severely impacted the manganese ore market. With a lack of new inquiries and only existing orders being met, production costs are climbing, squeezing profit margins. If this situation persists, sustaining operations will become increasingly difficult."

Factors influencing manganese ore prices:

Imported manganese ore offers to India at 6-month lows: Imported manganese ore offers to India hit six-month lows in August 2024. Offers for the benchmark Mn37% lumps from South Africa to India fell to $4/dmtu, the lowest since end-February 2024. The high-grade imported Mn ore is hovering at over-three-month lows of $6.2-6.65/dmtu. Since imported ore provides a direction for domestic pricing, a downward pressure is expected next month.

Higher inventories weigh down on Chinese manganese ore prices: The production cuts underway in China, coupled with the declining demand for finished steel, have negatively impacted manganese alloy smelters. Consequently, reduced demand for manganese ore has led to a buildup of ore stocks at Chinese ports.

Weaker manganese alloys market sentiments in India: Domestic silico manganese prices in India are hovering at a four-month low. The benchmark SiMn 60-14 from Raipur is hovering around INR 68,400/t. These levels were last seen in early April 2024. One key reason for the drastic fall in prices is the decline in exports of silico manganese. Around 50% of the total domestic manganese alloys production gets exported. Thus, a dull overseas market has obviously weakened domestic prices.

Outlook

The future outlook for India's manganese ore market remains uncertain, with continued price volatility expected due to weak demand and global market pressures. If steel production cuts persist, demand for manganese alloys and ores may further decline, leading to a prolonged slump.

However, with the potential rebound in market activities post-festivities and possible improvement in global conditions, a moderate recovery in manganese ore prices could occur by the fourth quarter of 2024 (Q4 2024). Market dynamics will largely depend on global demand and steel industry performance.