Indian silico manganese producers have been continuously decreasing their offers since end –Oct’21 in an attempt to attract good business. Prices of the 60-14 grade silico manganese have fallen this week as demand waned in the spot market.
According to SteelMint’s assessment on 15 Nov’21, Durgapur producers reduced their offers by INR 11,950/tonnes(t) to INR 94,250/t exw, while Raipur based smelters were offering at INR 99,500/t exw – down by INR 11,000/t w-o-w on 15 Nov’21.
Why prices are losing momentum?
Domestic demand mute
Indian buyers are reluctant to book silico manganese after observing the continuous fall its prices and are expecting a further drop. As a result, lack of demand intensified the oversupply; pressurizing producers to reduce their offers.
Meanwhile, stockists are offering lower prices compared to the current market rates to clear their old inventories before prices fall further.
Absent export demand
Indian silico manganese exporters continue to lower their offers on subdued demand, mainly from Europe and Asia. India is the largest exporter of silico manganese of different grades. Around 1.73 mn t has been exported by India till Sept-21. So, low export demand is also affecting prices.
Indian exporters are currently offering at around $1,450 -$1,650/t, FOB India for the 60-14 and 65-16 grades.
Tumbling steel prices
India’s steelmakers are also lowering their prices owing to lesser demand from both the international and domestic markets. This is also making steel producers resist silico manganese at higher prices.
Dropping Chinese silico manganese prices
China’s silico manganese prices have also been decreasing since a couple of weeks as power supply restrictions in China are easing, leading to higher production. Indian producers are obliged to follow suit as China is the largest producer of silico manganese and produced around 11.68 mnt (73% of the world’s silico manganese production) in CY’20.
In China’s major producing hub of Inner Mongolia, producers are offering RMB 8,000/t ($1252/t) for 60-14 grade, down by RMB 375/t ($59/t) w-o-w on 16 Nov’21.
Outlook
Silico manganese buyers are more likely in wait and watch amid bearish sentiments. Market participants may see further fall in silico manganese prices in the near term.
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