Indian silicomanganese prices increased w-o-w since last Tuesday by 2% in Raipur and by up to 4% in Durgapur owing to increased demand from the domestic and exports market.
Currently, producers in Raipur have concluded deals at INR 70,500/t, and the offer levels have increased up to INR 71,000/t. In Durgapur, prices are at INR 71,500-72,000/t, while most deals are concluded at INR 71,500/t Ex-works. In the export market, prices remain stable at $960/t FoB for 60-14 grade and $1060/t FoB for 65-16 grade. There is a confluence of factors involved in the sustaining increase of silicomanganese prices.
- Increased demand from Steel mills
Most of the steel industries avoided buying silicomanganese when the prices were falling with an expectation of further fall. However, as the steel prices went up, the consumption was high, which was mitigated by the buffer stocks. Therefore, the demand now is much higher as it includes the regular demand and the inventory replenishment quantity.
- Supply shortage in the spot market
Indian market is facing a severe supply crunch in the spot market as many major producers in Raipur are catering to the government orders and previous bulk orders from large steel mills. Meanwhile, Durgapur plants are keener towards exports and are also supplying to government orders. Vishakhapatnam producers are facing a severe supply shortage of 60-14 grade as most of the producers have shifted to 65-16 grade to cater to their committed export orders.
- Higher manganese ore prices
Though the prices of steel are correcting in the domestic market, silicomanganese producers are holding on to their prices as the manganese ore prices in the domestic market was increased by MOIL. Meanwhile, there is a firm belief in the market that imported ore prices are bound to increase in the coming weeks, which will increase their production cost. In the meantime, there is a general expectation that due to increased prices of silicomanganese MOIL would also increase their prices.
Outlook:
Prices of silicomanganese are expected to be range-bound with minor shifts in the upcoming week. However, producers are now in the wait-and-watch mode as they are eager to know the percentage increase of manganese ore prices by MOIL.
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