India: Domestic silico manganese prices continue to head north amid supply constraints

• Supply squeeze spurred by production cuts
  
  
• MOIL's Jan price hike strengthens market
  
  

In recent weeks, India's domestic silico manganese market experienced a significant surge in prices, rising for three consecutive weeks. This upward trend is attributed to a constrained supply and a market heavily influenced by sellers' offers, resulting in heightened demand from buyers eager to secure material.

According to BigMint's assessment on 7 January 2025, domestic prices of the 60-14 grade of silico manganese increased by INR 2,200/tonne (t) ($26/t) w-o-w to INR 69,200-70,000/t ($809-814/t) exw, though some smelters in Raipur offered material at INR 70,500-71,000/t ($820-$826/t) exw.

The premium grade (60-15) witnessed a slight hike to INR 72,000-73,500/t ($838-$856/t) exw in Durgapur and Raipur.

Confirmed deal (as per BigMint)

Factors driving up prices

Rising demand, tight supply spur prices: The supply squeeze has been driven by several factors, including production cuts from key smelters by up to 50-60%, as they were struggling to keep pace with market requirements. This situation has created a competitive environment, where sellers are in a position to dictate terms, leading to the sharp price increases. As buyers scramble to procure silico manganese, the competition has intensified, prompting smelters to raise their asking prices.

Additionally, the market sentiment has been further bolstered by rising demand for manganese alloys from overseas as well as in the domestic market, prompting Indian producers to capitalise on the favourable conditions. Many buyers are looking to replenish their inventories amidst fears of potential shortages, thereby exacerbating the upward momentum in prices, sources informed.

India manganese alloys export prices rise w-o-w: Export prices of silico manganese rose due to limited supply and heightened demand for immediate deliveries, enabling producers to increase their prices. As of January 6, 2025, BigMint's assessments noted the 60-14 grade at $835/t FOB, an increase of $11/t from the previous week, while the 65-16 variant climbed to $935/t FOB, up $16/t w-o-w. Notably, some major producers in Vizag and Raipur offered the 65-16 grade at even higher rates, ranging from $940 to $950/t FOB from ex-Vizag/Haldia, reflecting a robust market environment.

MOIL raises manganese ore prices: MOIL, India's state-owned mining company, announced a slight increase in offers for manganese ore effective January 2025. Mn grades above 44% saw a 1% m-o-m hike, while lumps below 44% rose by 5%. Additionally, all SMGR (Mn-30%, Mn-25%, Mn-20%) and fines grades increased by 5%, further supporting the upward price trend.

Outlook

Domestic silico manganese prices are expected to trend upwards in the near term due to constrained supply conditions. With determined sellers leading the charge, the market remains cautiously optimistic. However, industry observers are advised to closely monitor the situation, as supply and demand dynamics will significantly influence future pricing.