India: Domestic silico manganese prices edge up on steel market recovery, production cuts

• Climbing SiMn tags prompt steel mills to raise stocks
  
  
• Global Mn ore tags rise slightly, drive up alloy prices
  
  

According to BigMint's assessment on 17 December 2024, domestic prices of the 60-14 grade of silico manganese inched up by INR 800/tonne (t) ($10/t) w-o-w to INR 65,700-66,250/t ($773-780/t) exw, though some smelters in Raipur offered material at INR 66,500-67,000/t ($783-$788/t) exw.

Prices rose amid production cuts at smelters and a recovery in the steel market. Last week, BigMint reported that key smelters in Durgapur, Raipur, and Vizag implemented production cuts of up to 50% in response to declining overseas inquiries and subdued domestic demand. Additionally, a slight rebound was observed in the steel market this week, with prices supported by moderate buying activity in the semi-finished and finished steel segments.

The premium grade (60-15) witnessed a slight hike to INR 68,500-70,500/t ($806-$830/t) exw in Durgapur and Raipur.

Confirmed deals (as per BigMint)

Market overview

Steel mills respond to rising input costs: Concerned about the recent uptrend in silico manganese tags, steel mills increased their raw material stockpiles to mitigate the impact of potential future price hikes.

Meanwhile, global manganese ore prices also witnessed a slight uptick w-o-w, driven by increasing operational costs for miners. Despite modest demand for manganese alloys, producers adjusted their pricing to reflect higher input costs.

Prices of Australian 46% Mn ore increased by $0.10/dmtu w-o-w to $4.50/dmtu; Gabonese 44% Mn ore edged up by $0.05/dmtu w-o-w to $4.20/dmtu; and South African 37% Mn lumps saw a slight w-o-w rise of $0.08/dmtu to $4.08/dmtu.

Smelters keep offers high: Smelters maintained relatively high offers at around INR 67,000/t ($788/t) exw-Raipur, in line with the challenging market conditions and the need to protect profit margins. Additionally, the use of higher-priced old inventory of imported manganese ore put upward pressure on silico manganese tags. Moreover, output reductions minimised the surplus supply in the market, further supporting the price rise.

Encouragingly, inquiries from merchant buyers recently increased for exported material. Deals were concluded at around INR 66,500/t exw Raipur and Vizag, indicating a potential improvement in export demand.

Billet prices increase w-o-w: BigMint's daily steel billet index was assessed at INR 39,200 /t ($461/t) exw-Raipur on 17 December 2024, up by INR 700/t w-o-w. Buying activity in both the semi-finished and finished steel segments remained moderate during this week and supported the prices of steel. This, in turn, supported domestic offers for silico manganese, which is a key alloying element in steel production.

Outlook

The near-term outlook for domestic silico manganese prices remains volatile and subject to the interplay of several factors. While limited domestic supply and fluctuations in steel prices could exert upward pressure on silico manganese offers, declining demand for manganese alloys, driven by muted overseas interest, may keep tags under pressure.