- Smelters selling power to grid, production curbed by around 30%
- Many smelters switch to pig iron from silico due to better margins
- Elevated coal and coke costs driving silico manganese price rally
Data Deep Dive: The domestic silico manganese market is currently on a roll what with prices remaining on an upward trajectory. BigMint data show that monthly average prices in September in the key Raipur market in central India have climbed to over four-month high of INR 79,600/t exw for HC 64-14 material on 24 Sept’26.
Assessment shows that current prices are edging close to the INR 80,000/t level. So, what is driving the rally? BigMint takes a deep dive:
Factors driving silico manganese prices
Power economics triggers production cuts: Before 15 September, several key smelters in Raipur curtailed silico manganese production by around 30%, as alloy margins had dropped close to zero on account of surging power and coke costs. With grid power prices surging, selling available power in the open market offers more attractive returns to producers.
Power prices are on the rise due to strong demand and tight availability of coal, with the majority of utilities in the country reporting critical inventory levels.
Several smelters in central India have curtailed silico manganese production as selling surplus power to the grid has become more attractive than operating furnaces at current margins. With grid power realisations of around INR 10-12/unit, producers can generate roughly INR 12,000/t-equivalent from power sales, in some cases offering better margins than producing and selling silico manganese.
Sources informed that many smelters had the option to option to curtail ferro alloy production or sell the power to grid. They chose the latter option. Sources also said that since these smelters are also booked for contracts in October, with power prices remaining high, supply tightness is likely to persist in the market.
Market participants said some producers have also undertaken planned maintenance, and some major sellers have already committed their October volumes under contracts, reducing spot availability. The combination of production curtailments, planned maintenance and limited uncommitted material is providing support to silico manganese prices despite subdued demand.
Smelters switch to pig iron for better margins: From the last week of August, some smelters have shifted furnace operations to pig iron where margins are reportedly around INR 2,000–2,500/t higher than silico manganese. This has reduced silico manganese output and gradually tightened availability of domestic 60-14 material.
Incidentally, increased pig iron prices have reinforced this trend. Steel-grade pig iron prices in Raipur have been on an uptrend since mid-August, rising from around INR 38,800/t exw Raipur to INR 40,300/t currently. This represents an increase of approximately INR 1,200/t m-o-m and INR 1,600/t w-o-w.
Higher coke costs increase margin pressure: Pearl coke and related carbonaceous input costs have remained elevated during the period, adding to the production cost of silico manganese and further weakening production economics. The domestic met coke market has also remained tight, with strong pig iron demand and rising coking coal costs supporting prices.
BigMint’s PHCC index has surged to around $303/t CNF Paradip so far in Sept, up $50/t m-o-m , and significantly higher than around $240/t in mid-August. Meanwhile, BF-grade met coke prices have risen by around INR 5,300/t to INR 41,100/t ex-Jajpur from INR 35,800/t in mid-August. In western India, prices increased to INR 37,000/t ex-Gandhidham, from INR 33,600/t over the same period.
Improved export enquiries spur price rally: Overseas buyers have shown increased interest in fresh silico manganese orders. Buyers are also becoming more conscious of higher ocean freights and currency volatility, particularly the INR/USD movement, which is increasing uncertainty around landed costs and encouraging some buyers to cover requirements earlier.
India is the largest seaborne supplier of silico manganese in the world. BigMint data show silico manganese exports increased 30% y-o-y to 1.41 mnt in FY’26 and the strong momentum continues in FY’27. This is pushing domestic prices higher.
Reduced spot availability follows output cuts: The combination of 30% production curtailments, switch to pig iron and planned maintenance has reduced fresh silico manganese availability. This became more visible around mid-September and provided a stronger supply-side basis for the subsequent price rally.
Outlook
It is expected that silico manganese prices may remain on the upside in October as key players have opted for production curtailments next month too. Additionally, the market is waiting for Indian miners to announce manganese ore prices for October deliveries which may further push offers higher as there is a distinct likelihood that offers will edge up. However, coal price upside appears to be capped due to resumption of production at Chinese mines.
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