Indian Silico manganese prices remain stable as the market awaits for implications of new foreign trade policy which reduces export incentive on Ferro Alloys.
The Silico Manganese market activity in India remains low as major steel mills are yet to begin purchase plans in the new fiscal. However, producers from Raipur have raised their offers marginally with the reduction of CST rate (from 2% to 1%), as buyers outside Chhattisgarh will have to pay lesser by 1%. Grade 60-14 is currently being offered at around INR 45,500-46,000/MT (ex-Raipur) and INR 47,500 /MT (ex-Durgapur). According to sources, Prakash Industries is currently offering Silico Manganese at INR 43,500/MT (Ex-Champa).
“The mood is better in the market and we have concluded deals at higher levels from last week. Demand is edging up bit by bit,” stated a producer based in Raipur.
MOIL reduces Silico Grade Prices
Manganese Ore India (MOIL), the country’s largest and government owned, manganese ore producer has cut prices of various grades of manganese ore by 10-25% for the quarter April-June, 2015. Prices are cut on back drop of falling Manganese alloys prices in Indian and global market. The prices of all Silico grade prices have been reduced by 20-25%. Indian manufacturers believe that, MOIL prices will have little impact on current Ferro alloy prices, as they are already trading at a discounted price.
NEW FOREIGN TRADE POLICY (FTP) REDUCES EXPORT INCENTIVES GIVEN TO INDIAN FERRO ALLOY INDUSTRY
The competitiveness of Indian Ferro Alloys in international markets may be eroded further by the recent reduction in export benefits to the sector under the Merchandise Exports from India Scheme (MEIS), announced under Foreign Trade Policy (FTP), 2015-2020.
Earlier, Indian Ferro Alloy exporters used to get an incentive of 4% under Focus Product Scheme and a duty draw back of 1.4% , which has now been reduced to 2% under MEIS and 1.4% Duty Draw Back, based on category of the country, w.e.f 1 Apr, 2015. For countries falling under category ‘A’ will not be eligible for any incentive, for category ‘B’ it will be 2% and for category ‘C’ it will be ‘nil’. This means new ‘MEIS’ has effectively reduced incentive on Ferro Alloys by 2% when exported to emerging markets like Japan, Korea, ASEAN countries and reduced by 4% when exported to traditional markets like European Union, US and Canada.
Volume of deals in the export markets has been low. Although, some producers have raised their export offers after the new FTP announcement. Export offers for grade 60-14 is at USD 720-730/MT FOB East-coast India and 65-16 is being offered at around USD 800-820 /MT FOB East-coast India.
SteelMint assessed that if demand for Indian Silico Manganese does not pick up from overseas markets, it would put pressure on the producers to offer aggressively in the domestic market, and prices could tumble again.
Exchange Rate : USD 1 = INR 62.26
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