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India: Domestic silico manganese prices fall on limited buying activity

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Silico Manganese

BigMint Bureau

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10 Jul 2024, 19:32 IST

India: Domestic silico manganese prices fall on limited buying activity

Waning demand squeezes domestic silico manganese prices

Cautious buying leads to decline in weekly trade volumes

Producers plan production cuts amid declining margins

Domestic silico manganese prices experienced a significant w-o-w downward correction (INR 2,500/t or $68/t) in a cautious market. Buyers had enough stocks and thus were less interested in procuring.

BigMint's assessment on 9 July revealed a substantial w-o-w decrease of INR 2,300-2,800/t ($28-$30/t) for grade 60-14 silico manganese, to three-month lows. Prices of this grade were assessed yesterday at INR 71,800-72,400/t ($860-$867/t) ex-works.

The premium grade (60-15) has also witnessed a slight fall in prices, currently to INR 74,500-75,500/t ex-works ($892-$904/t) in Durgapur and Raipur.

Confirmed deals (as per BigMint)

Factors impacting silico manganese prices

Trade volumes fall as buyers expect correction: The silico manganese market is experiencing weaker-than-anticipated buying activity in both domestic and export markets. BigMint's data shows a significant decline in transaction volumes to 3,500t (1,000 t down from last week) across key regions. Limited demand may make mills cautious, and possibly effect further price adjustments in the near future.

Exports drop due to weak demand, shipping woes: Export prices of Indian silico manganese fell as exporters are facing a challenging environment. BigMint reports a significant decline in export offers this week ($37/t w-o-w). Subdued global trade activity and persistent container shortages are disrupting export activity and inflating freights. This confluence of factors has pushed export prices to a two-month low (SiMn 65-16 is at $1,050/t FOB, down $47/t. SiMn 60-14 is at $922/t FOB, down $ 20/t).

Imported ore prices range-bound: Silico manganese export prices were also impacted w-o-w by the mixed trend in manganese ore prices, the raw material for silico manganese. The decline in lower-grade ore prices w-o-w contributed to the drop in silico manganese prices, as this grade is used in larger quantities. The increase in higher-grade ore prices had a minimal impact since these are used in smaller quantities. Eramet Comilog has raised its August shipment prices for manganese ore to China. Gabonese lump ore with 44.5% manganese content now costs $9/dmtu CIF China, up by $0.7/dmtu.

Drop in billet prices w-o-w: BigMint's steel billet index, a key benchmark in India, witnessed a significant decline of INR 900/t($10/t) to INR 39,300/t ($470/t) exw-Raipur on 10 July, 2024. This downtrend reflects ongoing negativity in both finished and semi-finished steel segments, leading to cautious buying behaviour. Steel mills are limiting purchases to meet immediate needs while the market corrects. The weakness in the steel market is having a ripple effect on silico manganese prices.

Outlook

Uncertainty hangs over domestic silico manganese prices as steel mills delay large purchases. This cautious approach, likely fuelled by a wait-and-see attitude in the steel market, is impacting demand for silico manganese. Close monitoring of raw material costs and buying activity, both domestic and overseas, is essential to navigate this evolving market.

Furthermore, weak demand is prompting key producers in Raipur, Durgapur, and Vizag to cut output by 30-40%. This strategic move aims to prevent a domestic glut and maintain profitability. Recovery in demand and monitoring global imports are crucial for the industry.