India: Silico Manganese Prices Falls Further Owing to The Dull Demand

Indian Silico Manganese prices have been downtrending since the past month due to the deteriorating demand and high inventory with the Steel manufacturers. Silico Manganese producers are troubled by the liquidity crunch due to a prolonged economic disruption from the pandemic led lockdown. After the initial rise in the start of May, due to rise in Manganese Ore prices, the disquiet in the Silico Manganese market is obvious as the prices are returning to the price levels before lockdown. However, with the fiscal stimulus package announced by the government of India, a ray of hope can be seen as they believe that there might be a quantum jump in the Indian Steel sector performance.

Producers in Durgapur are offering Silico Manganese at INR 62,000/MT Ex-Works, although, a few deals are heard to be concluded at INR 61,500/MT. Meanwhile, the prices in Raipur are at INR 61,500-62,000/MT. However, the buyers are expecting prices to drop to INR 61,000/MT very soon. Meanwhile, the export market is picking up as the major importing countries are now coming back from the lockdown due to COVID-19. The offers in the export market are at USD 840/MT FOB India for 60-14 grade and USD 930/MT FOB India for 65-16 grade.

Producers are waiting for MOIL prices to be released for June. There is a strong belief among the producers that MOIL might decrease the prices in the upcoming revision, in line with the fall in the imported Manganese ore prices. However, private miners from Balaghat shared contrary views, as they believe that the prices should not come down as the production levels have been tremendously affected sine lockdown due to labour unavailability.

Outlook
The prices of Silico Manganese may fall further during the course of the week. However, the price revision by MOIL plays an important role in the current market situation, especially for Raipur based producers. Meanwhile, the financial incentive package to uplift the Make in India programme has given confidence to the Steel producers that it will certainly strengthen the infrastructure, construction and Auto sectors, bringing back Steel demand in the domestic market, and thereby lending support to Silico Manganese.