India: Silico manganese prices under pressure on low buying interest

The Indian silico manganese market has witnessed softening of sentiments, week-on-week, due to a fall in buying interest. However, major producers who booked ample amounts of material at higher prices two months ago remain sold out until Dec’21 and are reluctant to reduce their offers.

In the meantime, a few producers who are solely dependent on the domestic spot market have reduced their offers amid panic of build-up in inventory. Others have been forced to follow suit.

According to SteelMint’s assessment on 6 Dec’21, silico manganese (60-14) prices have corrected by 4-5%, w-o-w, to INR 90,250-92,500/t in the major production hubs of Durgapur and Raipur.

Factors driving down prices:

• Export demand remain muted as the winter holidays are approaching and seaborne buyers are refraining from booking material for Jan-Feb’22 shipments amidst a bearish market outlook. Moreover, Indian exporters are busy catering to export orders mainly to Europe. This is further creating enough inventory in Europe leading to a fall in Indian export prices. Currently, exporters are offering at around $1,460/t FOB India for 65-16 grade material.
  
• The domestic steel market is also slowing down because of dull demand. In addition, steel prices are witnessing a downtrend as buyers are on the sidelines, anticipating further price drops. Despite this, major steel producers have booked large quantities at higher prices last week, which can be attributed to demand remaining subdued from the small steel mills.
• Offers in China have fallen by around RMB 100/t, w-o-w, to RMB 7,400-7,650/t ex-works across the various provinces. Silico manganese buyers aren’t active in buying, but are cautiously watching the emerging trends. China being the largest producer, the parity with Chinese prices further impacts Indian silico manganese prices.

Outlook
Indian silico manganese prices are expected to remain under pressure through to the end of this month. Furthermore, if the omicron variant of Covid-19 hampers production at the South African manganese ore mines it will certainly affect the global supply chain since South Africa is the largest manganese ore producer in the world. This may further impact prices.