India's manganese ore imports rise over 30% y-o-y in H1CY'24. Know why?

• Anticipation of price recovery fuels ore stockpiling
  
  
• Domestic ore production rises by 10% in H1 CY'24
  
  
• Crude steel production rises by 10% y-o-y
  
  

India's manganese ore imports have been showing an exponential rise by 30% in January-June, 2024 (H1CY'24), data maintained with BigMint revealed that volumes increased by 29% y-o-y to 2.97 mnt in H1CY'24 against 2.30 million tonnes (mnt) seen in January-June, 2023.

Imports of manganese ore from South Africa, which comprise a leading share in the total volumes, increased 23% m-o-m in H1 CY'24 to 1.81 mnt. Imports from Gabon surged 67% m-o-m to 1.02 mnt in H1CY'24 against 0.60 mnt in H1CY'23.

Imported manganese ore prices fall to 3.5-year low in Jan'24: Monthly average prices of the ore have fallen steeply, as assessed by BigMint. For instance, the price of Mn 37% lumps imported from South Africa-origin fell to 4-year low to $3.83/dmtu in January 2024 since December 2019 (CY'19), (while in February, 2024 prices stood at 3.95/dmtu on uptrend), Mn 44% lumps of Gabon origin were at the lowest point similar to August 2020 prices. The January 2024 price was at $4.35/dmtu, while Australian lumps of Mn46% were also at the bottom line and stood at $4.68/dmtu. Similar levels were recorded in August 2020 ($4.64/dmtu). May 2024 volume was the highest in H1CY'24 standing at 0.78 mnt.

Geopolitical tensions, market volatility drive manganese ore stockpiling: As a result of falling imported manganese ore prices and shipments taking at least 90 days to reach to the Indian port from the date of booking (origin port), manufacturers of manganese alloys believed prices had bottomed out and would start increasing soon. Also, they were increasing stock before the monsoon hit the nation which could delay the shipment. Additionally, rising concerns for delayed shipment by 15 days due to geopolitical tension in MENA region was another concern to the manufacturers end so they started booking in February and March, 2024 so that they can maintain the pace of production if the demand is on the rise from export and domestic markets. They also increased production two-fold in anticipation of future increases in ferro alloy prices.

Crude steel production rises by 10% y-o-y: India's crude steel production rose at a higher pace of 10%, compared to iron ore consumption, to around 74 mnt in H1CY'24 against 68 mnt in H1CY'23. Within this quantum, the share of the blast furnace-basic oxygen furnace (BF-BOF) route remained static at 31 mnt, while EAF's contribution went up by a mere 1 mnt to 16 mnt. Induction furnace (IF) mills' share rose a significant 24% to 27.2 mnt from around 22 mnt in H1CY'23.

Indian manganese ore production rose by 10% y-o-y in H1CY'24. India's manganese ore production rose to 1.97 mnt in January-June, 2024 against 1.79 mnt in the CPLY. India's manganese ore consumption witnessed a significant increase of over 21% y-o-y in H1CY'24 reaching 4.94 mnt compared to 4.04 mnt in H1CY'23), as per BigMint data.

Outlook

Manganese ore imports are expected to remain stable. However, global alloy demand and ore prices will shape future import volumes. Geopolitical events, currency fluctuations, and domestic production will influence the market.