The Indian silico manganese market, which had been witnessing a steady increase in prices since May’21, stabilised this week. However, offer prices have been increased by some producers as the market remains bullish.
Most of the producers are booked for the next two months. Major domestic buyers are also booking bulk orders at higher prices to stock up for the next quarter in a supply-constrained market, which is further boosting sentiments.
Highlights of the week
Steel mills show resistance to bookings:
A few smaller steel mills are showing resistance to booking silico manganese as they margins are getting squeezed. Steel prices are not feasible at present for booking the material at such high prices. Thus, most of the smaller buyers are only booking limited quantity to keep their operations running. However, the major buyers are trying to secure inventory considering the international market.
China takes position in Asian market:
China is mostly known for consuming major portion of the global silico manganese production. However, increased offers of the same have driven the interest of Chinese suppliers toward exports. Though, the biggest driver of prices is the European market, China cannot focus on exporting to the continent due to higher freight costs and import duties.
However, the Asian market is open to China, where deals are happening to Japan and Taiwan at around $1,450/t FoB China. Thus, demand has softened from these countries as Indian smelters are now offering at as high as $1,550/t FoB India for the 65-16 grade. Nonetheless, the Indian smelters remain bullish as they are mostly sold out and Chinese exports volume is not high enough to put prices in peril.
Smelters await MOIL price revision
Manganese alloy smelters are waiting for Manganese Ore India Limited (MOIL) to release its new round of prices. Though, the smelters have booked enough imported ores that would last at least two months, MOIL prices are also a deciding factor for Raipur-based producers. It is highly anticipated that the state-owned PSU may increase its prices in line with the historic high prices of silico manganese.
Outlook
Silico manganese smelters believe that prices may increase only marginally in the short term as the market is yet to absorb the INR 100,000/t-mark. However, traders who bought cheaper material earlier are going low on stocks, and would likely match the offers of producers.
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