India's manganese ore imports drop over 16% in Aug amid subdued steel demand

• Drop in steel demand impacts manganese alloy production
  
  
• Reduced EU demand leads to lower manganese ore offtake in India
  
  
• Drop in ferro alloy exports hits ore demand
  
  

India's imports of manganese ore dropped sharply by 16% m-o-m in August 2022 to 0.30 million tonnes (mnt) compared to 0.36 mnt in July. Imports of the material stood at 2.42 mnt over April-August, 2022 while total imports over January-August, 2022 stood at 3.75 mnt.

Additionally, India's manganese ore production stood at 2.83 mnt and imports totalled 6.13 mnt in CY2021.

Factors impacting manganese ore imports

Drop in manganese alloys production: Import volumes of manganese ore dropped because there was a drop in manganese alloys production. The fall in manganese alloys production can be attributed to the drop in steel demand globally in this period, SteelMint noted.

The reduction in domestic manganese alloys production impacted imports of manganese ore, the raw material for manganese alloys. In anticipation of a further fall in manganese ore prices, Indian buyers were cautious about procuring the material. This resulted in a decrease in imports during the month.

Lower demand from steel-makers: Crude steel production came to a considerable halt during the last few months in major producing countries such as China, India and Russia. This resulted in a significant decline in offtake of manganese alloys from the steel industry, further denting demand for manganese ore.

Low global demand squeezes smelters' margins: Manganese alloys prices were down-trending since the past few months owing to low demand globally. This led to thin margins for the alloy smelters, forcing them to shift to manufacturing pig iron and sponge iron. This, in turn, also led to lower manganese ore demand.

Drop in Indian steel exports: Spiralling energy prices in Europe forced steel-end-users to also cut production. This had a huge impact on manganese alloys demand. Since Indian mills exported in substantial quantities to Europe, the drop in steel demand in this geography affected their demand for manganese alloys. That apart, the export tax reduced steel exports drastically, affecting manganese alloys requirements amid maintenance shutdowns by mills.

Ferro alloy exports fall: India's ferro alloys exports fell 38% y-o-y to 0.24 mnt in January-July 2022 because of the global drop in steel demand post-Europe's panic buying. That apart, demand was subdued in other steel importing countries too. As a result, importers and traders were keen to buy cheap material. It was difficult for the smelters to sell at such low prices, which led to reduced export transactions.

Leading suppliers

Imports from South Africa down 16%: South Africa continued to remain the largest exporter of manganese ore to India at 0.14 mnt in August against 0.20 mnt in July 2022. Imports from South Africa were stable y-o-y at 2.041 mnt in FY2022-23 from January-August.

Imports from Gabon drop 45%: Gabonese manganese ore imports dropped by 45% m-o-m to 0.064 mnt in August against 0.118 mnt in July 2022. Muted export demand for high-grade silico manganese led to a decrease in demand for Gabonese manganese ore from domestic alloys producers.

Imports from Australia stable: India imported 0.050 mnt of manganese ore from Australia in August compared to 0.046 mnt in July 2022, stable m-o-m. Container shortage and rise in freight costs impacted Australian imports during the month.

Imports from Zambia stable: Imports of manganese ore from Zambia were stable at around 0.002 mnt in August.

Imports from Brazil rise manifold: India's imports rose manifold m-o-m to 0.043 mnt in August 2022 in comparison to July.