- Production hurdles continue to restrict supply
- Manufacturing costs rise, squeeze margins
India’s prices of 60-14 grade silico manganese extended their upward trajectory, rising by INR 700/t ($8/t) w-o-w to approximately INR 71,900–72,200/t ($842–846/t) ex-works as on 27 May 2025, according to BigMint’s assessment. This price escalation is likely attributed to constrained supply, even as downstream demand indicators remain tepid. Market participants anticipate continued price resilience amid tightening availability.
The premium 60-15 grade also saw a slight w-o-w increase to around INR 74,500-75,000/t ($873-879/t) exw in Durgapur and Raipur compared to INR 74,000-74,500/t ($867-873/t) last week. Around 3,200 t of deals were concluded in 60-14 grade, exw-Raipur, w-o-w.
Confirmed deals (as per BigMint)
Factors supporting price uptrend
Elevated production costs: One of the primary drivers of the current price rise is the increase in production costs. Higher input prices particularly of imported manganese ore 37% (up by 0.11% w-o-w) and electricity, both critical to silico manganese manufacturing, have squeezed producers’ margins.
Despite soft demand from steelmakers, producers are showing strong resistance to lowering their prices, citing cost pressures and thin inventories. This strategic positioning is aimed at preventing a price collapse, thereby keeping the market well-supported.
Tight supply conditions persists: Silico manganese supply has remained constrained due to intermittent operational issues at certain Indian ferro alloy plants, stemming from maintenance shutdowns and regional logistical challenges. Additionally, some producers have reduced output in response to previously lower profit margins, further limiting availability in the spot market.
Factors putting pressure on prices
Weak downstream demand: One of the most significant constraints remains subdued demand from the domestic steel industry, the key consumer of silico manganese. Steelmakers, facing their own margin pressures and tepid finished steel sales, have been cautious in procurement, limiting their buying volumes and resisting higher alloy offers. BigMint’s daily steel billet index was assessed at INR 39,500/t ($463/t) exw-Raipur on 28 May 2025, down by INR 550/t ($6/t) w-o-w.
Softer global market sentiments: International silico manganese markets have shown signs of weakness, with prices in China and other major producing regions experiencing marginal declines. This global trend could spill over into the Indian market, especially if exporters redirect volumes to the domestic arena.
Outlook
With downstream demand remaining weak and input costs stabilising, prices are likely to hold steady in the near term. A major shift is unlikely unless there’s a notable recovery in steel demand.
A key trader told BigMint, “The recent silico manganese price rise seems temporary, driven by cost-led supply tightness.”
Leave a Reply