India: Domestic silico manganese prices rise after three weeks of decline

• Eramet raises manganese ore offers for July'24
  
  
• Market awaits MOIL's manganese ore price revision
  
  

Domestic silico manganese prices inched up by INR 1,000-2,340/tonne (t) across key regions in India on Wednesday. While, silico manganese prices have been dropping over the past three weeks, despite rising import costs of key raw materials. This anomaly suggests weak demand or unforeseen market forces at play. Key producing regions witnessed a notable price decline of INR 3,600/t(approximately $43/t) on a w-o-w basis compared to the assessment ending 21 May, 2024.

BigMint's assessments on 28 May revealed a substantial w-o-w decrease of INR 2,300-5,400/t ($28-$65/t) for grade 60-14 silico manganese. Prices of this grade were assessed yesterday at INR 81,700-82,400/t ($980-$988/t) exw. Notably, offers in Raipur were at INR 81,800-82,500/t ($980-$990/t) exw.

However, producers have reportedly started quoting higher prices at around INR 83,000-85,000/t ex-works following Comilog's new offer for Gabonese grade manganese ore for July shipment. Eramet Comilog has raised its July shipment prices for manganese ore to China. Gabonese lump ore with 44.5% manganese content now costs $8.30/dmtu CIF China, up by $1.40/dmtu.

Key producers in Raipur told BigMint that traders in the market are primarily squeezing smelters' quotations because they are holding bulk materials at lower prices, whereas raw material prices have skyrocketed and traders' quotations are less than the cost of production in local markets. Furthermore, Raigarh smelters' quotations range between INR 80,000 and INR 81,000/t exw ($960 and $971/t), which is less than Raipur's prices, placing pressure on smelters to continue quoting at the lower end.

Market overview

Subdued domestic demand dampens domestic prospects: Subdued domestic demand for silico manganese acts as a significant drag. Uncertainties in steel prices have led steel mills to adopt a cautious approach, resulting in lower bookings and reduced silico manganese consumption. This diminished domestic offtake translates into downward pressure on export prices.

Adding to the downward pressure, several key steel producers in Durgapur and Raipur concluded deals at lower prices last week -- in the range of INR 82,000-83,000/t exw.

Export prices fall by $40/t w-o-w on demand woes: Indian silico manganese exports are grappling with a steep price decline of $40/t over two weeks, indicating a potential global demand slowdown. Both key grades are nearing one-month lows. According to BigMint's assessments on 27 May 2024, the 60-14 grade was at $1,068/t FOB, a decrease of $47/t w-o-w, and the 65-16 grade was at $1,180/t FOB, a drop of $40/t w-o-w. Prices are edging close to a one-month low. Furthermore, some major producers in Vizag and Raipur were offering 65-16 grade ex-Vizag/Haldia at $1,210-$1,220/t FOB.

Many feel market players need to track supply-demand dynamics, raw material costs, and global market trends to understand the full picture. This will enable them to take informed decisions on pricing strategies and production adjustments to navigate this period of uncertainty.

Outlook

Domestic silico manganese prices face a cloudy short-term outlook with a potential for price fluctuations. Weakening demand (domestic and export), increased competition, and discounted offers weigh on prices. However, rising manganese ore costs could exert an upward pressure.

Furthermore, several smelters have temporarily suspended quotations until the release of MOIL's manganese ore prices and the upcoming index for imported manganese ore on 1 June.

After Eramet's offers for a July shipment to China are announced, it is anticipated that Indian domestic manganese ore prices may also increase. Close monitoring of supply-demand, trade trends, and raw material costs are essential for informed decision-making on pricing and production volumes.