The demand for silicomanganese products both domestically and internationally has been strong. The rising price of silico manganese on the domestic market is supported by the spot market’s relatively high operating rate of manufacturers and the cost of raw materials.
Additionally, the domestic market had to deal with rising downstream demand and a decrease in short-term supply.
As per SteelMint’s assessment, Raipur-based producers offered at around INR 76,200/t exw, which inched up by 1% w-o-w, while in Durgapur prices were at 76,000/t exw, nearly satble w-o-w.
Meanwhile, producers’ quotes for grade 60-14 remained at around INR 75,500-76,500/t exw-Raipur. On the other hand, Durgapur producers were seen quoting at INR 76,000/t-77,000/t exw. However, traders offered at around INR 75,500-76,000/t exw in both Raipur and Durgapur amid improving demand.
During the week, SteelMint recorded trade volumes of around 3,500 tonnes (t) of manganese alloys in the domestic market.
Responding to overseas enquiries, exporters offered at around $920/t FOB for 60-14 grade, were nearly stable from last week, while prices for the 65-16 grade were assessed at $1,010/t FOB, remained unchanged w-o-w amid rising export enquiries and limited deal conclusion since last week, which led to the w-o-w stable in prices.
SteelMint recorded trade volumes of around 2,500 t in the export market amid improved demand.
Factors supporting prices
- High operational costs: Manufacturers’ quotes are expensive due to their high operating costs. As a result, prices were quoted at a higher level. Furthermore, the steel and ferro alloys industries were experiencing uncompetitive conditions as electricity rates have spiked in Raipur and West Bengal, leading to a 10-20% reduction in current production volume.
- Supply-demand mismatch: A high demand was seen on the spot market for Indian producers’ products. Most manufacturers have already made reservations up to mid-February 2023. Some producers also deferred raising bids since they anticipate price increases. Since the domestic market has been short of the material, the price of silicon manganese has increased.
- Rising domestic steel demand: Last week saw a rise in domestic steel demand, which was accompanied by a number of inquiries and bookings of few bulk agreements, keeping prices on the higher side. SteelMint’s daily steel billet index was assessed at INR 46,500 /tonne (t) (+ INR 1,775/ t w-o-w) exw-Raipur on 27 December.
Outlook
The local demand for manganese alloys is still slightly sustained, India’s stockpile of manganese alloys has decreased, and an increase in electric rates will push the price of silico manganese higher in the near future. Given that the market has started to receive export inquiries, prices could increase further.
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