India's manganese (Mn) alloy exports to Iran face growing uncertainty because the Iran–Israel conflict continues to disrupt trade routes and buyer activity.
Iran is a key buyer of Indian ferro-manganese and silico-manganese, but tensions in the Middle East are putting a strain on the long-standing trading relationship.
India usually ships around 60-70pc of its ferro-manganese and 30-40pc of its silico-manganese to Iran, out of 250,000-300,000t exported annually, a major Indian exporter said.
The domestic market faces a serious oversupply issue if that much material cannot go to Iran, even with current production cuts, and they do not expect the situation to improve soon, the exporter added.
But temporary relief may come from Europe. The EU has deferred safeguard duties on ferro-alloys until September, creating a short window for increased buying interest, particularly from EU-based customers. But European buying is still at an estimated 50-60pc of pre-slowdown levels.
The India–EU free trade agreement negotiations could further support this momentum, exporters said.
The conflict is also disrupting major sea routes. Key shipping channels between India and Iran, such as the Red Sea, the strait of Hormuz and the Suez Canal, have become highly volatile. There are increasing piracy alerts and reports of rerouted or delayed vessels.
Exporters are already holding back shipments — not just because of weak demand, but also because fuel, power and freight costs remain stubbornly high, a market source said.
They believe that maritime insurance costs have also jumped, further squeezing exporters' margins.
The Argus-assessed price for 60pc silico-manganese alloy stood at $830-840/t fob east coast India, and the price for 65pc alloy was $910-930/t fob east coast. Prices for 75pc alloy are around $900-910/t fob on 24 June.
Producers will have no choice but to lower prices to keep material moving if exports fall further, one trader said. An export slowdown could flood Indian markets with excess supply, putting downward pressure on already weak domestic prices. Producers also face high input costs for power and logistics, along with customs duties on imported manganese ore that affect their global competitiveness.
The geopolitical disruption may accelerate a shift in India's export strategy. Indian exporters could pivot toward southeast Asia and Europe because buyers in Iran are now subject to trade volatility.
The alloy sector faces a turbulent period in the short term. Oversupply, domestic price pressure and elevated logistics costs could compress margins, prompting Indian producers to scale down production or seek new markets.
