- Panic selling, lower offers weigh on prices
- Need-based procurement in domestic market
- Downturn in steel prices delay silico purchase decisions
Indian domestic silico manganese prices have continued their downward trajectory, reaching over a three-month low. This w-o-w decline reflects the ongoing challenges faced by the market.
BigMint’s assessments on 23 July revealed a substantial w-o-w decrease of INR 500-1,000/t ($8-$11/t) for grade 60-14 silico manganese. Prices of this grade were assessed yesterday at INR 68,300-69,000/t ($816-$825/t) exw. Notably, offers in Raipur were at INR 69,000-69,500/t ($825-$830/t) exw.
Confirmed deals (as per BigMint)
Market overview
Smelters’ face headwinds as buyers adopt cautious stance: The domestic silico manganese market continues to face challenges. Steel mills are adopting a cautious approach to procurement, opting for need-based purchases amidst expectations of further price declines. This, coupled with lower offers from traders and panic selling, have contributed to a downward pressure on prices.
The recent decline in low grade imported manganese ore (drop by $0.40/dmtu to $4.9/dmtu (Mn 37% CNF India, mostly used in producing low-grade silico manganese), prices have further exacerbated the situation, as it provides additional justification for buyers to demand lower prices. This confluence of factors has created a difficult operating environment for silico manganese producers.
Cost-competitive offers from nearby regions: Manufacturers from Raigarh are offering material in the range of INR 68,000 to 68,500/t ($775), putting pressure on the Raipur domestic price. Few other merchants provided lower rates, making the players cautious to accept higher offers. However, major smelters are accepting offers ranging from INR 67,500-68,000/t ($806-$812/t).
Fall in Indian silico manganese export prices: Weakening demand from key markets like the Middle East and Japan, coupled with logistical challenges, have led to a $20/t decline in Indian silico manganese export prices. This downturn is driven by a combination of factors, including reduced steel production, liquidity constraints, and geopolitical tensions in these regions. This weak demand and squeezed margins may impact silico manganese exports in the short term. These challenges have forced Indian exporters to navigate a difficult market environment characterised by lower prices and reduced volumes.
Drop in billet prices w-o-w: BigMint’s steel billet index, a key benchmark in India, witnessed a significant decline of INR 1,000/t to INR 38,600/t ($462/t) exw-Raipur on 24 July, 2024. This downtrend reflects ongoing negativity in both finished and semi-finished steel, leading to a cautious buying behaviour. Steel mills are limiting purchases to meet immediate needs while the market corrects. The weakness in the steel market is having a ripple effect on silico manganese prices.
Outlook
India’s domestic silico manganese market faces potential price fluctuations. Weak export demand and competition from other regions could push prices down, while global miners expect higher ore prices to persist.
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