India: Silico manganese prices on decline as demand falls

India silico manganese prices declined amid a continuous fall in demand. Meanwhile, offers from producers were not very active because the overall cost of production was high. This led to some manufacturers refusing to sell at low prices. However, traders looked keen to buy at lower prices. There were still some inquiries but uncertainty ruled in both the domestic and overseas markets.

According to SteelMint’s assessment on 31 May, Raipur-based producers offered at around INR 81,000/tonne (t) exw, down by INR 4,000/t w-o-w, while prices in Durgapur were at INR 80,000/t exw, dropping by INR 3,000/t against last week.

Responding to overseas inquiries, exporters offered around $1,120/t for 60-14 grade, down by $60/t from last week. Prices for the 65-16 grade were assessed at $1,245/t FOB India, down by $105/t w-o-w. Meanwhile, SteelMint recorded trade volumes of around 13,500 t in a shrinking market scenario.

Factors that impact silico manganese prices

• Bearish spot market: Liquidity in the silico-manganese market remained subdued as bearish sentiments persisted. This resulted in a decrease in price of silico manganese.
• Manganese ore prices stable: Manganese ore prices remained stable in the domestic market but demand was lower owing to production cuts in a few states, which led to the decrease in prices of silico manganese.
• India’s steel prices fall on weak market inquiries: Steel prices were on a downtrend amid lack of inquiries from the domestic market. In addition, weak steel demand was led by the export-import duties imposed by the Indian government which resulted in further drop in silico manganese prices.

China market overview

China’s silico manganese (60-14) prices fell by RMB 100/t to RMB 7,400/t ($1,079/t) exw-Inner Mongolia, while the 65-17 grade was offered for RMB 8,250/t ($1,236/t) exw-Inner Mongolia. Silico manganese prices were stable amid weak demand. However, cost of production was high owing to rise in raw material prices. The overall market was in wait-and-watch mode, awaiting stability in prices.
However, silico-manganese futures on the Zhengzhou Commodity Exchange (ZCE) for September 2022 delivery climbed w-o-w to RMB 8,378 /t on 27 May, 2022.

Outlook

Silico manganese prices are currently close to their cost of production. Prices are expected to remain stable and could improve if demand in the steel market increases. In the near term, inquiries from the international market may have a significant impact on demand and prices.