India’s federal budget presented on February 28, 2010 proposes to invest more than $38 billion in the Indian infrastructure sector during 2010–11. The announcement has predictably spread considerable cheer in the country’s steel sector. In the opinion of India’s Steel Secretary, Atul Chaturvedi, the domestic demand for steel will see a significant growth of about 10% in the wake of project implementations. This is higher than the 9% likely to be recorded over the current 2009–10 period. Steel production over the 2010–11 period is expected to peak at more than 65 million tonnes, a substantial increase over the 61–62 million tonnes expected this year. The budget announcement was almost immediately followed by a price rise of $11–13 per tonne in the Indian market. The budget announcement bodes well for both global and domestic manganese demand.
In the Indian market, ferro-manganese (70%) is currently selling at about $1,320 per metric tonne – a 5% hike over prices recorded in mid-March. The higher production costs are expected to further ramp up the price over the next three months. The market price of manganese ore (40%) is between $242 and $264 per metric tonne. The high price of the ore has given a boost to the price of silicon manganese (60/14) as well. The price chart has seen a rise of 15% over the last four weeks. The export price of silicon manganese has reached a buoyant $1,300 per metric tonne FOB.
Magnesium prices in the European market have recorded an increase of over 3% since December 2009. The prices averaged between $2,800 and $2,900 per metric tonne during the month of March and although the global picture remains unclear, we see demand for Magnesium increasing steadily over the next 18 months.
Riding on the improved steel demand globally, the month of March began with global molybdenum prices reaching $16–17 per pound. JP Morgan forecasts a production growth of 7% this year and 6% in 2011. The trend indicates that prices in 2011 could average at $23 per pound. Since no new supply will hit the market until 2011, analysts think it would take a major dip in the demand for petrochemicals, stainless steel, and specialty steel to depress molybdenum prices.
On March 5th, 2010 in Our First Post We Predicted for 2010:
Molybdenum – At least $20 USD/lb by end of year.
Manganese – Continued rise in Electrolytic prices.
Magnesium – Prices should begin to strengthen in 2010.
