India: Domestic silico manganese prices fall further amid limited trade activities

• Manganese ore volatility clouds domestic prices
  
  
• Weak buying activity putting pressure on market
  
  

India's domestic silico manganese prices have witnessed a five-week downturn due to weak demand from local steel mills and subdued export inquiries.

BigMint's assessment on 2 July exhibited a sharp decline in prices by around INR 2,200-3,300/t ($38-$46/t) for grade 60-14 silico manganese in comparison with 25 June, 2024, Prices fell across key regions like Raipur, Durgapur, and Vishakhapatnam. This decline brings prices to around INR 75,000-75,300/t (USD 921-940/t) ex-works, reaching a two-month low, according to BigMint's data.

Confirmed deals (as per BigMint)

Factors impacting domestic prices

Cost pressures squeeze domestic prices: The Indian domestic silico manganese market is currently experiencing downward pressure on prices. This confluence of factors is squeezing margins for smelters:

• Fluctuating manganese ore prices: Uncertainty surrounding manganese ore prices, both domestically and for imports, created challenges for cost stability in silico manganese production. In the last two weeks, the price of imported ore has remained steady for high grade 44% and 46% lumps, while 37% has decreased by $0.35/dmtu. Correspondingly, domestic miner MOIL's July delivery pricing for lower-grade ores saw an 8% decline m-o-m, while high grades (above 44%) saw a 2% up m-o-m in comparison from the last.
  
  

• High production costs pressure: Indian silico manganese producers face a squeeze. Buyer offers (INR 75,000/t exw) are below production costs, producers cited. Uncertain manganese ore pricing (stable high-grade imports, declining lower-grade imports) added to the challenge. Expect cautious production and a focus on cost optimisation by producers.
  
  
• Weak buying interest: Limited buying inquiries, particularly from export markets with reduced volumes, further weakened the bargaining position of smelters. This dynamic is pressuring domestic offers downward. Regions like Durgapur and Vizag, typically reliant on exports, are facing additional challenges in finalising deals due to their lower asking rates. The pressure to reduce prices is particularly acute in these areas.
  
  
• Manganese alloys exports slump on weak trade, soaring freight costs: Indian silico manganese exporters face a challenging environment. BigMint reported a significant decline in export offers this week ($ 35/t w-o-w). Subdued global trade and persistent container shortages disrupted export activity and inflated freight costs (up 50-60%). This has pushed export prices to a 2-month low (SiMn 65-16: $ 1,115/t FOB, down $ 51/t; SiMn 60-14: $ 955/t FOB, down $ 70/t).
  
  

Outlook

Indian silico manganese prices might fluctuate in the near term. Weak domestic demand and potential import pressure suggest downside risk. But now Eramet has raised their August shipment offer. It remains to be seen how silico manganese producers will handle this price hike amidst a pressured market. Close monitoring of domestic steel production and global export inquiries is essential for informed decision-making.