India: Domestic silico manganese prices edge down amid limited demand

• Domestic steel mills maintain cautious stance amid market fluctuations
  
  
• Liquidity crunch, weak demand squeeze domestic silico manganese prices
  
  

Domestic silico manganese prices in India have shown a downtrend this week after a period of stability. The fluctuations in the Indian silico manganese market stemmed from a complex interplay of regional and global factors, including demand dynamics, supply chain disruptions, and broader macroeconomic conditions.

Factors impacting domestic prices

Steel mills cautious as manganese ore prices hit multi-month lows: Domestic steel mills have taken a strategic approach to silico manganese purchases, carefully balancing their raw material needs with prevailing market uncertainties. The recent sharp decline in imported manganese ore prices has created anticipation among buyers, leading to a cautious "wait-and-see" approach.

Manganese ore prices across all major grades have fallen sharply, reaching multi-month lows. Australian and Gabonese high-grade ore prices have each dropped by over $2.90/dmtu, while South African lump ore prices have hit their lowest levels since March 2024, likely due to reduced demand for lower-grade manganese alloys. The subdued performance of the domestic steel market has further reinforced a conservative buying sentiment. Steel mills are reluctant to make significant purchases at current prices, given the potential for further declines or shifts in market dynamics.

Liquidity crunch limits demand, smelter operations: The liquidity crunch has constrained cash flow for steel mills and buyers, resulting in cautious purchasing behaviour and reduced demand for silico manganese due to limited finished steel demand. Smelters, facing financing difficulties, have been forced to cut back on production, which tightened supply and exerted additional downward pressure on prices. The combination of reduced demand and operational challenges from financing constraints has led smelters to lower prices further.

Indian silico manganese exports hold firm w-o-w: Despite weak global demand, Indian silico manganese exporters have kept prices stable. Prices of all grades have remained relatively steady, with only minor declines observed in some lower-grade varieties. Major producers have resisted significant price reductions, maintaining a narrow FOB range of $960-$965/t for the 65-16 grade. While there has been an increase in inquiries, few have resulted in actual deals, highlighting the persistent challenges in the global market.

Outlook

Domestic silico manganese prices may see a slight decline in the near term due to cautious consumption by steel mills and a lack of export inquiries. Additionally, delays in trade finalisation are adding further downward pressure on prices.