Low demand from the domestic mills prompted the prices of silico manganese to drop further as many mills cut production amid bearish market sentiments.
Furthermore, the domestic buyers were eager to receive the lower silico manganese quotations due to the continued decline in the raw material prices. Consequently, prices fell further.
On the other hand, some manganese alloys producers are considering shutting down before October in light of the bearish market.
According to SteelMint’s assessment, Raipur-based producers offered at around INR 72,700/t exw, down by INR 1,300/t w-o-w while prices in Durgapur were at INR 72,300/t exw, lower by INR 1,200/t w-o-w.
Responding to overseas inquiries, exporters have offered at around $915/t for 60-14 grade, down by $15/t from the last week, while prices for the 65-16 grade were assessed at $1,020/t FOB India, down by $10/t w-o-w. Meanwhile, SteelMint recorded trade volumes of around 3,000 tonnes (t) in a shrinking market.
Factors affecting demand
- Quotes from traders lower than manufacturers: Traders offered prices for silico manganese that were lower than that of manufacturers in order to convince buyers in the domestic market. This led to prices getting quoted on the lower side.
Also, some producers have started lowering production of manganese alloys owing to uncertain sentiments and low demand in the domestic market.
Additionally, the steel and ferro alloys industries are experiencing uncompetitive conditions due to the sudden rise in electricity rates in West Bengal, which resulted in a fall in production of 30-40%, sources informed. - Indian steel market sees subdued demand: The Indian steel market was subdued owing to the fluctuations in raw material prices and lower demand. As a result, many buyers are in a wait-and-watch mode for booking in bulk quantities. This further created weak demand in the spot market, leading to reduced prices.
- Export prices may be affected by exchange rates: A depreciation of the Indian rupee (INR) against the US dollar (USD) is likely to affect export prices for seaborne buyers. Thus, Indian smelters have received lower rates for Indian manganese alloys in the export market.
China market overview
Silico manganese (60-14) prices in China were stable at RMB 6,400/t ($892/t) exw-Inner Mongolia, while the 65-17 grade was down by RMB 50/t at RMB 7,150/t ($997/t) exw-Inner Mongolia. During the week, silico manganese prices remained relatively stable. In the current peak season, inventory consumption of enterprises are improving, price support is prevailing in the market, and the supply of low-priced goods has decreased significantly.
Outlook
As a result of the reduction in manganese alloy production in India to mitigate the loss of sales, silico manganese prices may continue to fall. Price recovery may occur if export inquiries resume.
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