India: Silico manganese prices continue to decline in bearish market

Indian silico manganese prices continued to fall since March 2022 amid subdued demand and the resultant lower inquiries from market participants. Manufacturers had limited room for any further price reduction owing to higher prices of raw materials. Meanwhile, traders showed a certain willingness to purchase and sell at current bearish price levels.
Meanwhile, SteelMint recorded trade volumes of around 5,000 tonnes (t) amid a bearish market.

According to SteelMint’s assessment, Raipur-based producers offered at around INR 93,000/t exw, down by INR 5,000/t while prices in Durgapur were at INR 91,000/t exw, lower by INR 4,000/t w-o-w.

Responding to overseas inquiries, exporters offered at around $1,250/t for 60-14 grade, down by $120/t from last week, while prices for the 65-16 grade were assessed at $1,470/t FOB India, down by $80/t w-o-w.

Factors affecting downtrends in prices

• Exchange rate impacts export prices: The depreciation of the rupee (INR) against the dollar (USD) is likely to have an impact on export prices for seaborne buyers. This also resulted in lack of inquiries for India’s manganese alloys from the export market.
• Liquidity crises to destock material: A liquidity crisis prompted sellers to destock material at lower prices so they could clear their monthly expenditures amid high selling pressure.
• Steel prices drop amid low sales: Steel prices were under pressure due to lower sales, which impacted the procurement cycles of distributors and stockists. The slowdown in the steel market has also led to a decline in prices of silico manganese.

China market overview

China’s silico manganese (60-14) prices were stable at RMB 7,500/t ($1,180/t) exw-Inner Mongolia, while the 65-17 grade was offered at RMB 8,405/t ($1,319/t) exw-Inner Mongolia. The silico manganese market in China was relatively quiet, with lesser shipments, and lower trade activities. Overall, rise in manganese ore prices after the end of the five-day holidays has not affected the prices of silico manganese and the market may remain stable for the time being.

Outlook:

The upcoming purchase auctions in which SAIL will participate as a buyer are likely to offer some short-term price indications to the market. On the other hand, production costs are rising amid scarce supply of coal, which are pushing up silico manganese prices too. This may keep prices firm or restrain them from falling further.