India: Silico manganese prices marginally down w-o-w amid lower demand

Silico manganese prices decreased marginally by INR 2,000/tonne (t) w-o-w owing to continued lower domestic demand last week as market participants opted to wait and watch.
Meanwhile, SteelMint recorded trade volumes of around 6,100 tonnes (t) amid lower demand.
According to SteelMint’s assessment, Raipur-based producers offered at around INR 103,000/t exw while prices in Durgapur were reduced to INR 101,000/t exw.
Exporters offered at around $1,370/t for 60-14 grade, down by $30/t from last week, while prices for the 65-16 grade were assessed at $1,550/t FOB India, down by $40/t owing to lower inquiries from overseas.

Why is demand subdued?

• Downward pressure on pricing: Owing to the downward pressure on pricing in the market, buyers are not showing interest, expecting prices to drop further. There was pressure mainly from the traders to keep prices on the lower since  domestic demand was weak.
  Meanwhile, major tenders were concluded at low rates too which encouraged smaller producers to expect prices to drop.
• Overseas enquiries shift to China: Major enquiries shifted to China since this country offered highly competitive rates  in the overseas market, which put further pressure on demand from domestic buyers, sources informed.
• Fluctuations in raw material costs: End-users are also facing challenges in the form of fluctuating raw material and input costs —  manganese ore, coal, freight, and power tariffs —  which dampened demand.
  Furthermore, a few steel mills have cut production owing to lower demand and a rise in raw material costs.
• Oversupply of material: In addition, some new furnaces have come up in the Durgapur region, leading to oversupply in the spot market. This further resulted in a decrease in silico manganese prices.
• Weakened Indian steel market: The Indian steel market has been performing weakly due to lower demand.

China market overview

China’s silico manganese (60-14) prices were stable at RMB 7,550/t ($1,180/t) exw-Inner Mongolia, while the 65-17 grade was offered at RMB 8,395/t ($1,319/t) exw-Inner Mongolia. Demand for silico manganese was weak in China while producers were not too keen to sell since profits margins have been reduced due to increased raw material prices. The market overall was less willing to sell at lower prices.

Outlook

High inventory at the user-end in the domestic market will discourage procurement in the short term.

But, since imported manganese ore prices are relatively strong, prices of silico manganese may rise in the near future.