- Smelters keep offers firm amid market discrepancy
- Focus on imported ore amid scant domestic supply
The domestic silico manganese market has experienced a dramatic price surge this week. Prices have jumped a significant INR 9,000/t (tonne) ($108/t) w-o-w compared to last week’s assessment (ending 30 April, 2024). Panic buying amid hike in manganese ore prices, both in the domestic and global markets, lifted offers.
BigMint’s assessments on 7 May revealed a substantial w-o-w increase of INR 7,900-9,700/t ($94-$116/t) for grade 60-14 silico manganese. Prices of this grade were assessed yesterday at INR 93,400-96,100/t ($1,120-$1,151/t) ex-works. Notably, offers in Raipur have climbed even higher, reaching INR 95,000-96,100/t ($1,138-$1,151/t) ex-works, with some deals reported at even higher levels of INR 97,000/t exw-Raipur.
The premium grade (60-15) has also witnessed a slight rise in prices, currently at INR 98,500-99,500/t ex-works ($1,180-$1,192/t) in Durgapur and Raipur.
Factors behind rise in domestic silico manganese prices
Sellers keep prices firm: Smelters are maintaining firm asking prices (INR 94,500-INR 96,500/t exw Raipur) due to a significant increase in raw material costs. Imported ore prices have risen by 15%, while domestic ore prices have jumped by 25% m-o-m. These higher input costs have squeezed margins, leaving smelters with little room to negotiate on price reductions despite lower offers from some buyers.
One of the major producers from Raipur informed BigMint that some ongoing deals by traders at lower prices at INR 92,000-INR 93,000/t exw (potentially due to stock purchased earlier from Raigarh) were creating a discrepancy in the market. This is impacting overall market sentiment, particularly in Raipur and Durgapur. This was one of the major reasons behind prices of silico manganese not improving at the pace of ore prices in the domestic market.
Hike in billet prices w-o-w: BigMint’s daily steel billet index was assessed at INR 45,400 /t ($511/t) (up by INR 1,600/t w-o-w) exw-Raipur on 8 May 2024, which reached an 11-month high from September 2023. This, in turn, impacted the price of silico manganese, a key alloying element in steel production.
Outlook
Rising domestic steel prices and escalating costs of imported raw materials suggest a potential upward trajectory for silico manganese prices in the near term. Close monitoring of ore prices remains crucial for participants to gain a comprehensive understanding of the future direction of the ferro alloys market.
Furthermore, there is a possibility of a material shortage in the near future, as producers are hesitant to release their offers following Eramet’s announcement of a further increase in manganese ore prices.
In addition, a major importer of ore from India recently reserved a large quantity of manganese ore from Gabon at a price of $7.5/dmtu, and Mn37% ore from South Africa was concluded at a price of 5.75/dmtu. This has clearly indicated that domestic market prices will rise as a result of the limited supply of ores, which is forcing smelters to purchase from overseas at higher prices.