India: Domestic silico manganese prices fall to 1-month low on limited trade

• Competitive quotes from overseas limit manganese alloys export bookings
  
  
• Fall in steel prices keep domestic inquiries under pressure
  
  

Domestic silico manganese prices in India fell this week. Weak market preference for lower-priced transactions led to a w-o-w decrease of around INR 5,700/t ($68/t) in key regions. This downfall in the prices occurred because of the poor domestic demand and rigidity towards higher quotes in the market.

BigMint's assessment on 18 June exhibited a sharp decline in prices by around INR 5,300-6,000/t ($64-$72/t) for grade 60-14 silico manganese. Prices of this grade were published in between INR 81,000-82,000/t ($971-$982/t) ex-works in the key regions of Raipur, Durgapur and Vishakhapatnam. Prices are hovering close to one-month low, as per data maintained with BigMint.

The price trajectory for this week was very much aligned with last week's market anticipations which suggested an intense decline.

Factors driving silico manganese prices:

Weak demand triggers selling pressure in domestic: Market sentiment leaned towards lower-priced transactions, forcing some producers, particularly medium and small-scale players, to offer concessions. Established producers with strong reputations maintained their initial offers, but overall buying activity remained tepid. Buyers capitalised on the opportunity, securing materials at more favorable rates, and displayed reluctance to accept higher quotes. This dynamic ultimately pressured larger producers to adjust their pricing strategies downwards to clear their inventories.

Additionally, to generate short-term cash flow, some smelters, particularly in Raipur, offered material at discounted rates (around INR 81,000-81,500/t exw). This price pressure ultimately compelled major producers to follow suit and adjust their own pricing strategies downward.

Downturn in manganese alloys exports demand: The export market for silico manganese diminished with a faster pace this week, for grade 60-14 prices fell by $43/t to $1,063/t and grade 65-16 dropped by $15/t w-o-w to $1215/t. Limited trade volumes was also noticed as offshore demand shifted to countries like Norway and Poland due to their competitive offers.

Another, key regions like Durgapur and Vizag are said to be an export centric market which faced challenges in setting their deals, which however impacted the domestic prices too. It would be significant to see how this region moves ahead with its offers in the coming week.

Drop in billet prices w-o-w: BigMint's steel billet index, a key benchmark in India, witnessed a significant decline by INR 1,950/t to INR 41,750/t ($500/t) exw-Raipur on 19 June, 2024. This downtrend was due to the pale demand and poor workings in finished and semi-finished markets. Meanwhile, the market for supportive commodities also took a negative turn which resulted in lowered billet prices.

Outlook

In near-term domestic silico manganese prices might fall slightly, as declining exports demand, and potential inventory pressures. Rising import ore costs could limit price declines, but competitive global markets pose a challenge. Monitoring demand trends, export activity, production costs, and inventory levels are crucial. Prices may fluctuate in the near term depending on these factors.