Indian silicomanganese prices increased since yesterday evening due to improving steel prices in the domestic market. Semifinished prices went up early in the week, which motivated the otherwise pessimistic producers of silicomanganese to increase the prices.
Prices of silicomanganese were falling linearly almost twice a week due to the down-trending steel market. Meanwhile, cynicism was intensifying as the manganese ore prices are still on the higher side, which is squeezing the profit margins of producers, especially from Durgapur area. Meanwhile, prices in Durgapur further softened to INR 63,500/t last weekend, due to which many steel mills of central India procured from Durgapur.
Meanwhile, in Raipur, many producers are booked for the month and are not offering in the spot market, due to which there is a lack of material in Raipur market. Traders are rumoured to have concluded many deals at lower prices earlier which has created a supply shrinkage with the major producers in Raipur.
However, as the steel prices improved and oversupply of silicomanganese was checked out, prices started to witness a positive trend again this week. Producers believe that manganese ore prices will increase as soon as the Chinese people return from their New year holidays, due to increased buying.
The sentiment is driven by the lowering manganese ore inventory at the Chinese ports, which is down by 5% m-o-m in January end. Meanwhile, this week there was a marginal uptick of 0.57%in the inventory and totalled to 6.67 mnt. meanwhile, inventory of Tianjin port decreased by 47 kt and is currently at 4.8 mnt. The inventory is expected to increase in the upcoming week due to lowered buying owing to new year holidays. However, there is a strong expectation that the purchases will increase as the market reopens.
SteelMint’s assessment for silicomanganese is as follows:
- Ex-Raipur: INR 66,000/t
- Ex- Durgapur: INR 65,000-65,500/t
- FOB India (60-14): $ 920-940/t
- FOB India (65-16): $1020-1040/t
However, a few producers and traders who were under intense selling pressure were heard to short-sell in the market in the first half of the day.
Outlook:
Producers are still ambiguous about the future of the manganese alloy prices and are completely following the steel prices trend.
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