Indian silicomanganese prices witnessed a new high as the transaction prices crossed the INR 80,000/t mark and prices are expected to climb higher on supply issues. Exporters reported to SteelMint that there is substantial demand from European countries and Japan, but now they don’t have enough quantity to offer. Meanwhile, prices in the domestic market have become more lucrative.
Currently, producers in India are offering at INR 84,000-85,000/t, however, few producers are also offering at higher levels. Meanwhile, exports prices are at $1120/t for 60-14 grade and $1220 for 65-16 grade.
There are a number of reasons which are driving up the silicomanganese market:
Good inquiries in the export market
Market participants shared with SteelMint that shortage of containers is forcing buyers to book higher quantity of silicomanganese to offset the uncertainty of delayed shipments. The quantity of silicomanganese used in steel is significantly low but vital, therefore, the stocking up of inventory is resulting in much higher demand from the exports market.
High domestic demand coupled with tight supplies
The domestic demand for silicomanganese increased after steel prices soared in Jan-end and steel production went high. Meanwhile, most of the major steel producers started stocking up a higher amount of silicomanganese in an anticipation of supply shrinkage. Thus, the supply was tight and all smaller induction furnaces had to bear the brunt of escalating alloy prices. Prices have increased substantially by more than 20% in just three months. Currently, there is a limited quantity available with most of the producers and they are offering very low quantity in the spot market as they are overbooked till next month.
Manganese ore prices continue to rise
Producers are anticipating that the manganese ore prices are set to increase in the domestic market. They believe that in line with increasing imported ore cost, MOIL might increase the prices and the higher silicomanganese prices would provide better support for the acceptance of higher prices. Meanwhile, imported prices are expected to increase further on the South African logistics issue and higher electricity tariffs from next month. It is anticipated that increased freight charges would add up in the cost of ores and the Chinese acceptance of higher-priced ores will increase prices in the coming weeks.
Outlook
Although the market looks healthy and the supply remains tight, producers are now wary that any correction in the domestic steel prices might dent the prices in the domestic market. Meanwhile, if the production of silicomanganese in Ukraine returns to normal levels, demand from Europe would lower down which will halt the overall escalation of prices.
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