India: Domestic silico manganese prices inch down further amid supply-demand mismatch

• Buyers gain upper hand in domestic market
  
  
• Smelters cut production to stabilise prices
  
  

Domestic silico manganese prices have remained under pressure this week, as steel mills, facing weak demand, have adopted a cautious approach to procurement and are opting for need-based buying. This cautious sentiment, coupled with surplus supply, has put pressure on smelters to offer competitive prices. While some smelters have attempted to maintain prices by reducing production and implementing planned maintenance, the overall market trend remains bearish.

According to BigMint's assessments on 19 November 2024, prices of the 60-14 grade slipped further by INR 500/tonne (t) ($6/t) w-o-w to INR 64,500-65,100/t ($763-770/t) exw. Offers in Raipur stood at INR 66,000-66,500/t ($782-788/t) exw.

However, premium-grade (60-15) silico manganese prices witnessed a slight increase to INR 66,500-68,000/t ($788-$805/t) exw in both Durgapur and Raipur.

Confirmed deals ( as per BigMint)

Market overview

The domestic silico manganese market is currently experiencing a struggle between buyers and sellers.

• Bargaining power shifts to buyers: Steel mills, with sufficient inventories, have adopted a cautious approach to procurement. This has put pressure on smelters to offer competitive prices to secure deals. Some deals were closed too, at lower rates of INR 64,000-64,500/t exw in Durgapur, Raipur and Vizag. This has shifted the bargaining power in the buyers' court, forcing smelters to offer more competitive prices to secure orders.
  
  
• Smelters cut output to address oversupply: Smelters, in response to the weak demand and aggressive buyer behaviour, have implemented production cuts and planned maintenance to balance supply and demand. This strategic move is helping to maintain price stability by reducing supply of material. In the Raipur region, 40-50 mva furnaces with production capacity of 15,000-18,000 t per month have opted for planned maintenance. This might help to address surplus in the market due to limited deal conclusions in export and domestic markets.
  
  

Global competition drives down export prices: The Indian silico manganese market continues to experience downward pressure, with prices declining by $10/t w-o-w. The 65-16 grade has reached an 11-month low of $877/t FOB, while the 60-14 grade has dipped to $792/t FOB.

Weak global demand and increased supply have forced sellers to reduce their offers to remain competitive. Despite this, the market remains cautious, with limited buying interest and delayed deal closures. The uncertain global economic outlook and potential production cuts by global miners are key factors influencing the market dynamics.

Steel prices down w-o-w: The domestic silico manganese market is experiencing a slowdown due to weaker demand from the steel sector. The decline in steel prices persists, with BigMint's daily steel billet index closing at INR 38,200/t ($388/t) exw-Raipur on 27 November 2024, down by INR 900/t ($10/t) w-o-w.

Outlook

While the market is currently in a state of flux, the balance between buyer demand and seller supply, along with strategic production adjustments by smelters, is likely to keep prices relatively stable in the near term. However, any significant shifts in steel demand or global market dynamics could alter this scenario.