- Global supply squeeze increases Indian export prices
- Costlier ore increases smelters’ cost of production
Silico manganese export prices jumped by $106/tonne (t) this week due to rising imported ore costs and strong demand. In fact, prices touched over-one-year highs. With majority of the producers sold out for May shipments, limited tonnages have also resulted in a hike in offers. Supply delays and low spot inventory are tightening supply further, potentially pushing prices even higher.
According to BigMint’s assessments on 29 April 2024, the 60-14 grade was assessed at $993/t FOB, surging by $123/t w-o-w, and the 65-16 grade was at $1,055/t FOB, up by $88/t w-o-w. Furthermore, some major producers in Vizag and Raipur were offering SiMn 65-16 grade Vizag/Haldia at a FOB of $1,070-$1,080/t. These prices are hovering at over 1-year high levels, as per data maintained with BigMint.
Factors supporting price hike
Costlier imported ore increases cost of production: Indian manganese ore imports are facing a price rise of $0.60-$1.00/dmtu, the highest in almost two years. Overseas suppliers are raising asking prices, suggesting potential supply constraints in their regions. This concern is amplified by a recent production halt at a major Australian miner (South32). The tight supply is leading to higher asking prices for immediate deliveries to India. The long-term impact on the Indian market remains to be seen, but close monitoring of global supply dynamics is crucial.
Meanwhile, soaring imported ore prices (+$0.60-$1.00/dmtu) have increased production costs by an estimated INR 5,000-6,000/t ($60-71/t). This has resulted in limited immediate availability of manganese alloys, with new orders potentially facing delivery delays until June.
In response, sellers are raising prices, leading to a surge in inquiries despite the increase. Export prices have also risen by around $100/t FOB.
Positive export demand: The Indian silico manganese export market has experienced recovery in export demand. Key international consumers in Egypt and Turkey have recently placed significant orders, totalling around 1,000-2,000 t of material on high prices. This surge in export demand, coupled with ongoing global supply constraints, has ignited a rise in export prices for Indian silico manganese.
However, the Indian market remains cautiously optimistic, awaiting a potential revival in demand from Europe, a historically significant importer of Indian manganese alloys (typically 10,000-12,000 t monthly import volumes). A return of European buying interest could further bolster prices of Indian silico manganese.
China silico manganese market robust: China’s silico manganese market is robust, driven by rising raw material costs and a rebound in downstream market sentiments. Spot prices of silico manganese (60-14) have jumped up by RMB 800/t ($110/t) to RMB 6,700/t-6,900/t ($925/t-$953/t). This trend may influence global markets, with higher Chinese prices potentially leading to increased Indian exports and tighter overall supply.
Outlook
Silico manganese prices are expected to rise further in the near future due to a potent mix of robust demand and constrained supply. Bookings are hitting new highs, exceeding availability, and producers are already booked through May. Limited spot inventory and rising import costs of key raw materials further exacerbated the supply squeeze. To navigate this dynamic market effectively, close monitoring of evolving demand patterns, particularly within key steel industry sectors, is crucial for accurate long-term price assessments.