India: Silico manganese producers reduce offers to solicit trade

Indian silico manganese prices have started slipping as demand dried up due to a sharp surge in prices, and suppliers, therefore, are reducing prices to entice buyers, SteelMint learnt from sources.

According to SteelMint assessment, Raipur-based producers kept offers at around INR 124,000/t exw while prices in Durgapur were at INR 123,000/t exw.

Exporters are offering at around $1,610/t for 60-14 grade, up marginally by $10/t, while prices for the 65-16 grade are assessed at $1,795/t FOB India owing to better enquiries from exporters.

Major factors behind domestic price correction:

• Lack of enquiries from buyers and export market: Enquiries from buyers fell due to higher prices which put pressure on domestic prices. Stockists and traders with high inventory expected to receive more queries from the exports market, which did not happen. They were forced to correct prices in view of selling pressure in the market. Meanwhile, SteelMint recorded trades for around 1,500 t in the domestic market amid lower demand. In addition, queries from buyers in Europe fell as distribution via ports is facing a major problem due to container shortage.
• Rise in selling pressure on slowdown in demand: Rising trade level selling pressure led to the price correction as traders holding substantial inventory amid slowdown in domestic demand were forced to reduce offers.
  Notably, Indian manufacturers are booked till mid-May’22 and are going slow on selling to stop prices from falling, which has created supply concerns and put pressure on traders and stockists to lower prices.
• Festival season: Market demand remains low during the festive season which has created panic among traders who are willing to sell at a lower price ahead of Holi.
• Poor steel demand: Steel demand remained muted due to high prices. Further, downfall in raw material prices also resulted in a correction in steel prices. Consequently, silico manganese prices edged lower.

Chinese market

China’s silico manganese (60-14) prices are up at RMB 7,700/t ($1,203/t) exw Inner Mongolia, while 65-17 grade material is being offered at RMB 8,495/t exw Inner Mongolia.
Silicon manganese futures are going strong and most of the manufacturers conclude deals on futures-based prices. In terms of cost, the prices of raw materials such as manganese ore and coke have risen, and the cost of silicon manganese has increased.

Overall, the price of silicon manganese rose due to rising costs which has increased confusion in the market. Although Indian manufacturers are doing business, it is difficult for the traders to follow the same sentiments and they are left with no option but to lower prices in the domestic market.

Outlook

Domestic silico manganese prices are expected to trend lower in the coming days due to the lack of domestic demand during the festive season.