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India: Domestic silico manganese prices rise amid higher steel prices, squeezed margins

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Silico Manganese

BigMint Bureau

281 Reads

3 Oct 2024, 19:14 IST

India: Domestic silico manganese prices rise amid higher steel prices, squeezed margins

Strengthening steel prices drive domestic silico manganese offers up

Tightening supply, market dynamics shape outlook of silico manganese

According to BigMint's assessment on 1 October 2024, domestic prices of grade 60-14 silico manganese rose by INR 1,950/t ($23/t) w-o-w to INR 67,300-67,800/tonne ($801-$808/t) ex-works, though some smelters in Raipur offered at INR 68,000-68,500/t ($810-$815/t) ex-works. Notably, offers in Raipur have climbed further, reaching INR 69,000-69,500/t ($821-$827/t) ex-works. The premium-grade (60-15) also witnessed a slight price increase, currently at INR 71,000-71,500/t ($845-$857/t) ex-works in Durgapur and Raipur.

Confirmed deals (as per BigMint)

Market overview

Margin squeeze forces smelters to raise prices despite lower offers: Domestic silico manganese prices have risen due to a combination of factors. Initially, smelters maintained high asking prices (INR 68,000-INR 68,500/t exw Raipur) to compensate for thin margins caused by declining prices in few weeks. Fluctuations in raw material costs further exacerbated production challenges.

Indian smelters' strategic procurement of high-priced manganese ore from Gabon in May 2024 at $6.86/dmtu, and Mn 37% from South Africa in July 2024 at around $5.1/dmtu, in anticipation of rising prices and supply constraints, has contributed to higher domestic silico manganese costs. These increased input costs have squeezed margins, limiting the smelters' ability to negotiate price reductions despite lower offers from buyers.

Hike in billet prices w-o-w: BigMint's daily steel billet index was assessed at INR 41,500 /t ($511/t) (up by INR 2,000/t w-o-w) exw-Raipur on 3 October 2024, which reached a 3-month high from June 2024. This, in turn, impacted the price of silico manganese, a key alloying element in steel production.

Outlook

Domestic silico manganese prices may see a slight increase due to improving steel prices and rising production costs. Limited supply from key smelters could further tighten the market. It is advisable to closely monitor exports and steel prices for market insights. However, with MOIL's high-grade manganese ore offers declining and festive holidays approaching, end users are opting for tougher negotiations or deferring bulk bookings, which could potentially prevent a sharp rise in manganese alloy prices.