India’s imported Manganese ore market remains weak with sluggish demand and light transactions of the material
Manganese ore imports in August’13 have dropped to 187,800 MT from 208,200 MT on July’13. Prices in the international market are quite stable from the past couple of weeks. The country is currently facing a sudden shortage of Manganese ore owing to the delayed shipments. Manganese ore prices are likely to decline unless the demand for the material in the global market improves.
Steel 360 spoke to Nilesh Sharma, Director, QVC Group to have his view in the market. QVC deals in almost all metals, minerals and related raw materials. QVC exports bulk Ferro Alloys across the globe. It has also got two large scale prospecting licenses for Manganese ore mines in Zambia.
Q. In 2012, Manganese ore imports went up from 10% to 50%. Can you share your thoughts on the Manganese ore market in India this year and how has your company performed so far?
Ferro Alloys industry is going through a very rough phase this year mainly due to global recession and poor demand for Steel which also badly affected Manganese Alloys demand and prompted lot of Manganese Alloys facilities either to reduce their production or to completely shut down. Hence, the Manganese ore market is not very good at the moment and the import growth is negative compared to last year. Our company has performed well as far as Manganese ore & export of Ferro Alloys is concerned and till now we have registered a positive growth compared to the last year. We also got National Award for export excellence from EEPC for the second consecutive year and also Rashtriya Udyog Ratna Award this year.
Q. What are the factors that influence imported Manganese ore industry? Do you think it is possible for India to negotiate in the market instead of just passive acceptance?
Demand and prices for imported Manganese ore is predominantly decided by the Chinese demand but of late, every Manganese ore miner is considering India as an important market and demand for imported Manganese ore is certainly on the rise on the prospects of rise in steel production and its demand as our per capita steel consumption of 59 kg is much below the world average of 215 kg. We have certain chance to bargain and influence the future imports of Manganese ore. The biggest factor which currently affects the imported Manganese ore is weak demand for Manganese alloys apart from other factors which include high cost of Manganese alloy production, Rupee devaluation, high interest costs, unavailability of high grade Manganese ore etc.
Q. We have learnt that South Africa holds maximum share of Manganese ore imports to India. What do you think is the current scenario for South Africa Manganese ore compared to other nations and its future outlook in the Indian market?
It is true that India imports its maximum requirement of Manganese ore from South Africa at present, second being Australia. However, South Africa is also dogged be severe logistics problem which is the major constraint for export of Manganese ore from there. At present, South Africa and Australia play a dominant role as compared to other nations, and in future too South Africa will remain the major source of Manganese ore to India.
Q. What are the current offers for imported Manganese ore? And with the Rupee substantially devalued, how is the demand at current levels?
Currently, South African Carbonated Ore (37%) is being offered at USD 4.5/DMTU and for higher grades, big miners like BHP hold the key while others follow suit, where the price is still as high as USD 5.9/DMTU. Ferro Alloy industry in India is not in a good shape due to poor demand which also affects the Manganese ore demand and industry is also suffering fro m weaker Indian Rupee which makes Manganese ore import more expensive.
Q. MOIL has rolled over prices for the next quarter. How do you see the likely path and price levels of Manganese Alloys? Will Ferro Alloy prices find support?
Manganese Alloy market is mainly driven by the demand – supply and at present, there is a huge gap between the two. We need to understand that production cost of Manganese Alloy is not dependent only on the price of Manganese ore, there are many other factors which contribute to the higher production cost which include high cost of electricity, higher debt cost etc. At present, MOIL has lesser share in the consumption of Manganese ore in India compared to the earlier years and our dependency on imported Manganese ore is increasing due to increase in the production facilities. Ferro Alloy prices are at the rock bottom and any further fall from the current levels would be more painful for the industry which is already finding it difficult to sustain at current levels.