India: Silicomanganese prices attain stability amidst increased manganese ore prices

Indian silicomanganese prices had been falling since the past few weeks and dipped further south last week by INR 2,750/t within a span of four days. However, MOIL’s increase of manganese ore prices has stopped the fall and the producers are now firm in their offers and are resisting any further corrections. Although, the domestic market seems to have battled the downtrend for now, but the market remains uncertain as the producers are divided over the international manganese ore sentiments. 

Producers in Raipur believe that the prices have bottomed out and shouldn’t go down further. The production costs are also higher now with an increased cost of manganese ore. This sentiment is also backed by the fact that the major silicomanganese suppliers will be catering to government tenders, leaving them with lesser quantity to sell in the market. Meanwhile, Durgapur producers are a bit bearish due to limited trades concluded in the export market. 

Prices in Raipur are at INR 66,000-66,500/t Ex-plant and in Durgapur, the prices are at INR 65,000/t Ex-plant. Meanwhile, export prices are at USD 930/t for 60-14 grade and USD 1,030/t for 65-16 grade. However, very few deals were done at these levels from Vizag port, while, the export market remains relatively weak. 

Meanwhile, MOIL increased the prices of manganese ore by 5% m-o-m for Feb ’21 against Jan ’21 prices. This increase was aimed at maintaining international price parity. Although this marginal increase might not support any spike in the silicomanganese prices but it has arrested a further fall in prices. 

It is also expected that the prices of South African manganese ore might increase amidst hampered logistics due to heavy rainfall in the region. UMK, one of the major miners of South Africa has declared force majeure owing to hindered road and railways transport. However, due to Chinese holidays, it might have a marginal effect on the prices right now. 

Outlook:
Prices of silicomanganese might sustain at these levels for now as the market is expected to follow stable market conditions until mid-February.