- Waning demand puts squeeze on domestic silico manganese prices
- Market sees price divergence amidst supply concerns
Prices of Indian silico manganese remained range-bound for another consecutive week, impacted by current demand and material availability. However, some manufacturers offered lower prices to entice buyers, while others proposed higher prices than the current range due to limited supply.
This week, the price range of silico manganese (60-14) in India stayed range-bound from the previous assessment on 20 March. It was INR 65,500-65,800 /t exw ($790-797/t) in the major producing districts of Durgapur, Raipur, and Vizag. The premium grade of silico manganese (60-15) was available in Durgapur and Raipur for approximately INR 67,000-67,500/t ($803-812/t) exw. Prices reached a two-month low.
At the same time, the majority of companies are working to complete previous export orders that will last until April 2024. As a result, some producers have discontinued their retail offerings. This has resulted in holding prices in same range.
Factors keeping prices stable
1. Competitive strategies in the domestic market:
- Trader pricing tactics: To stimulate buying interest, traders strategically offered silico manganese at lower prices compared to those offered by manufacturers in key regions. This tactic, while potentially increasing sales volume in the short term, exerted downward pressure on overall market prices.
- Production adjustments by manufacturers: Certain key producers in Raipur and Vizag regions have strategically reduced their output by 30% due to weak demand and downward pressure from merchants. By matching supply to current demand and preventing a possible glut in the domestic market, this strategy sought to retain profitability.
3. Constrained demand, buyer caution:
- Conflicting market signals: Uncertain market sentiment, with conflicting opinions on future price movements, led to cautious buying behaviour in both the local and export markets. This lack of robust demand, coupled with resistance to purchase at high costs, kept domestic silico manganese prices range-bound.
- Moderate steel demand: Domestic steel demand exhibited a moderate level of activity with limited bulk booking inquiries owing to fiscal year end. This lack of strong buying pressure from steel mills, the primary consumers of silico manganese, further contributed to the stability in prices. Domestic billet prices in some key markets declined by INR 100-550/t. BigMint’s domestic steel billet index was assessed at INR 4,0200/t exw-Raipur on 28 March 2024, up by INR 600/t w-o-w.
Outlook
Given the tightening supply, the short-term outlook for Indian silico manganese prices points to the possibility of upward revisions. However, careful monitoring of these elements, particularly export order delivery and future global price movements, will be essential in setting any potential price swings in the following weeks.
It has been heard that the bulk tender of silico manganese (60-15) was completed at an exw cost of around INR 67,133/t(excluding all taxes). This will also establish the standard pricing for the silico manganese in the days ahead.