India's Manganese ore imports fall m-o-m in Feb. What to expect in short term?

Imports drop amid subdued steel demand Lower exports from SA drag down imports Volumes, prices may recover as steel demand pick up

• Imports drop amid subdued steel demand
   
• Lower exports from SA drag down imports
   
• Volumes, prices may recover as steel demand pick up

Mixed import trends from leading suppliers

Imports from South Africa fall 45%: South Africa, which enjoyed the lion's share of 53% of India's manganese ore imports in calendar 2022, saw volumes falling 45% m-o-m to 0.14 mnt in February 2023 against 0.25 mnt in January.

Gabon supplies up 30%: Gabonese manganese ore imports, which comprised around 32% of the total imports of the material, were up 30% to 0.10 mnt in February 2023 against 0.07 mnt in the previous month, amid rising prices.

Imports from Australia stable: India's imports of manganese ore from Australia were nearly stable m-o-m at 0.051 mnt in February 2023, almost at levels similar to the previous month's.

Factors that pulled down manganese ore imports in February

Fall in domestic steel production: India's crude steel production decreased 8% to 10.05 mnt in February 2023 from 10.93 mnt in January, as per SteelMint data, a factor that led to lesser need of ferro alloys.Consumption, too dipped, although a marginal 5% m-o-m in February to 10.5 mnt as project segment demand started drying up.
But these factors had an impact on imports of manganese ore.
 

Rise in manganese ore prices: Import prices of manganese ore in February saw an upswing. Grades Mn 44-46% rose around 10% m-o-m to $6.15/dmtu and $6.58/dmtu respectively. Prices of Mn37% inched up 5% to $4.66/dmtu. Prices increased as a result of handling and processing charges.

Gabonese manganese ore was offered at around $5.45/dmtu for February shipment, up $0.70/dmtu (13%) m-o-m from January.

Importers resisted the higher prices to an extent.

Supply from South Africa drop: Since the South African imports comprise the major share of the total, a drop in level from this geography pulls down overall volumes. South Africa's national logistics behemoth, Transnet, saw labour strikes persisting in February. That apart, ports suffered from weather-related issues which hampered loading. These factors restrained South Africa's exports of the material.

Bearish global trends cap silico manganese demand: Bearish sentiments persisted in the global silico manganese market in February amid high inflation and decreased liquidity. These factors had a domino effect on India's domestic silico manganese demand as well as on imports of the raw material - manganese ore.

India's silico manganese exports down: Silico manganese export trends heavily influence imports of manganese ore. Exports in February 2023 dropped 12% m-o-m to around 85,000 tonnes (t) against 96,000 t in January because of bearish steel demand trends in major importing countries.

Outlook

India's manganese ore imports may remain stable or recover in the short term on the back of moderate domestic steel demand as well as an uptick in export shipments, especially to the European Union.

However, manganese ore import prices may rise because of fluctuations in energy tariffs and material handling expenses.

• [Editor:倪駿豪]