India: Demand slump weighs on domestic silico manganese prices

• Bid-offer disparities continue to put pressure on domestic prices
  
  
• Competitive prices from Raigarh, Jharkhand are impacting domestic offers
  
  

Indian domestic silico manganese prices have continued to exhibit a decline this week. The price oscillations of the Indian silico manganese market are a reflection of the intricate interplay between regional and global forces.

This week, prices of silico manganese (60-14) in India fell further by INR 300-600/t ($4-7/t) w-o-w to touch INR 65,600-66,300 /t exw ($790-797/t) in the key producing regions of Durgapur, Raipur and Vizag. The premium grade of silico manganese (60-15) was offered at around INR 66,500-67,300/t ($803-812/t) exw in Durgapur and Raipur. Prices are touching a two-month low.

"A major producer from Raipur informed BigMint that inquiries from Europe had temporarily stopped, resulting in a regional fall in demand and selling pressure in domestic market. However, these are offset by moderate inquiries from Southeast Asia, which are keeping prices stable in the export market and indirectly help back domestic prices from falling steeply."

Factors impacting domestic prices:

Need based procurement in the domestic market: India's steel mills procured silico manganese according to their needs. This cautious approach reflects buyers' anticipation of further price cuts, resulting in lower purchase volumes in the immediate run. The reluctance to acquire at current rates puts additional strain on silico manganese smelters, which are already struggling in a shrinking market.

Silico manganese export prices range-bound, bid-offer disparity prevails: BigMint's assessments on 18 March, 2024, reflected this stability, with the 60-14 grade remaining unchanged at $815/tonne (t) FOB and 65-16 holding steady at $912/t FOB. Major producers in Vizag and Raipur continued to offer the SiMn 65-16 grade at a FOB range of $912-$915/t.

The substantial difference in pricing between buyers and sellers was a problem for silico manganese exports. Seaborne buyers have reduced their bids to INR 65,500-66,000/t exw ($788-793/t) due to weak global demand, while Indian suppliers are offering material at higher prices of INR 67,500-68,000/t exw($811-817/t). This discrepancy has caused export growth to stagnate and drop prices. The outcome could possibly be dependent on suppliers altering their prices or buyers opening up to the current offers.

Cost-competitive offers from other regions: Manufacturers from Raigarh and Jharkhand are offering material in the range of INR 64,500 to 65,500/t ($775 to $787/t), putting pressure on the domestic price. Few other merchants provided lower rates, making the players cautious to accept higher offers. However, major companies are accepting offers ranging from INR 66,500-67,000/t ($800-$805). It has also been reported that the majority of the players are fully booked till March 2024.

Outlook

Silico manganese prices are predicted to fluctuate in the short term. The current circumstances suggest a mixed market dynamic. Moreover, rumours have surfaced regarding a potential rise in electricity tariffs effective in Vizag from April 2024. However, we are still awaiting verification of this information. If it happens, production costs could rise, making producers cut back on output because they're worried.

BigMint suggests monitoring the situation in Europe, the ongoing buying activity from Southeast Asia, and the performance of the domestic steel trade would be critical in predicting the future trajectory of silico manganese prices in India.