India: Silico manganese prices decline on bearish demand outlook

Silico manganese prices in India dropped marginally as domestic and export demand for manganese alloys weakened. Manganese ore prices have been declining for quite some time which has allowed buyers to take advantage of lower prices. Furthermore, several domestic bulk deals drove down silico manganese prices.

As per SteelMint’s assessment, Raipur-based producers offered material at around INR 75,000/t exw, down 5% w-o-w, while in Durgapur prices were 74,700/t exw, down 4% w-o-w.

Producers’ quotes for 60-14 grade hovered around INR 74,500-76,000/t exw-Raipur, while Durgapur producers quoted at INR 73,500-75,000/t exw. However, traders offered at around INR 73,000-74,000/t exw amid limited demand.

During the week, SteelMint recorded trade volumes of around 4,000 t of manganese alloys on the domestic market.

Responding to overseas enquiries, exporters offered at around $940/t FOB for 60-14 grade, down 2% w-o-w, while prices for 65-16 grade were assessed at $1,050/t FOB, down 1% w-o-w.

As a result of limited enquiries from overseas, silico manganese export prices fell. SteelMint recorded exports at around 1,000 t amid low demand.

Factors keeping prices under pressure

• Bearish global market: Bearish sentiments persisted in the global silico manganese market which dampened liquidity, thus affecting domestic market prices.
• Selling pressure: The consumer was seeking lower costs despite the pressure from manufacturers to increase sales. Silico manganese prices globally have been impacted on high inflation and decreased liquidity, which have also impacted domestic pricing. There was lack of demand both locally and abroad. Dearth of buyers interested in purchasing at high prices naturally led to pressure piling up on prices.
• Steel demand remains subdued: The Indian steel market was sluggish due to lack of demand and fluctuating raw materials prices. As a result, many customers preferred to wait and see whether spot demand and prices would continue to weaken before reserving bulk volumes. SteelMint’s domestic steel billet index was at INR 46,025/t exw-Raipur on 28 February, down INR 275/t w-o-w.

Outlook
In the domestic market, silico manganese prices may change on a temporary basis. Major miners such as Sandur have planned to increase manganese ore capacity for the next fiscal in order to serve rapidly growing domestic demand. This may also impact silico manganese prices going forward.