India: Silicomanganese prices increase as the steel market improves

Since yesterday, Semi-finished steel market improved driving up the silicomanganese prices. Silicomanganese producers have a strong hand in negotiations as supply shortage has hit the domestic market. There are a limited number of producers who have enough material for immediate dispatches, while most of the producers are either catering to government tenders or have long-term contract orders. 

Meanwhile, demand for silicomanganese has increased, as steel manufacturers were refraining from booking when the market was going down. Thus, the increased demand is mainly because steel mills are rushing in to buy to build their buffer stock along with regular requirements. 

In Raipur, only a handful of producers are now catering to the spot market demand, while rest remained sold out for the month. Since Raipur is a landlocked area, exports are not convenient and thus producers of manganese alloys are fulfilling major government tenders. Meanwhile, in Vizag also the producers are catering to the government tenders and long-term contracts. Exporters are waiting for the Chinese market to reopen as they foresee some upward movement in the manganese ore prices which could pull up the prices of silicomanganese further in the international market. 

Currently, producers are offering at INR 68,000/t Ex-works, both in Raipur and Durgapur. Meanwhile, few producers who have limited stock are also quoting INR 69,000/t ex-Raipur. However, the demand in the export market is tepid and the buyers are waiting for the Chinese market to reopen after their holidays. However, with the persisting container shortage coupled with better demand in the domestic market, producers are also refraining from adjusting their prices despite dull demand.  Currently, smelters are offering 60-14 grade at $960/t FOB India and 65-16 at $1,070/t FOB India. 

Outlook 
Although the demand and supply are working in favour of the sellers, they remain ambiguous about the steel prices in the coming week. While exporters are waiting for the inquiries which are lagging due to the holidays.