India: Domestic silico manganese prices stabilise after marginal hikes

• Tight supply conditions following production cuts keep prices supported
  
  
• Anticipatory buying activity stimulates domestic prices
  
  

Domestic silico manganese prices have experienced a slight increase by INR 500/t against the last week. This upward movement is attributed to strategic production adjustments by domestic smelters. While the overall market sentiment remains cautious, these developments have provided temporary support to prices, which has resulted in price stability in last two days after hikes were seen towards the end of last week.

This week, the price range of silico manganese (60-14) in India was firm compared to the previous assessment on 30 July. As on 7 August 2024 the price was within the range of INR 68,400-69,000/t exw ($814-823/t) in the major markets of Durgapur, Raipur, and Vizag.

The premium grade of silico manganese (60-15) was available in Durgapur and Raipur at approximately INR 70,500-71,500/t ($840-851/t) exw.

Confirmed deals (as per BigMint)

Factors influencing silico manganese prices:

Limited spot supply and cautious buyers keep prices stable: : Major silico manganese producers in key regions, including Durgapur, Raipur, and Vizag, are experiencing tight production schedules with furnaces booked until August. This has resulted in a limited supply of the material available in the retail market. Despite buyers' resistance to higher prices, producers have maintained their offerings, leading to a gradual increase in overall price levels.

This supply-demand imbalance, coupled with the ongoing production commitments, have created a supportive environment for price stability.

Additionally, several large factories with a capacity of 14 furnaces have adjusted their output to accommodate the demand-supply gap. As a result, they are currently using 7-9 furnaces. Although this somewhat lessens the situation, the limited supply eventually helps to support the price.

Anticipated price increase drives temporary active booking of silico manganese: A surge in buying interest for silico manganese has been observed in recent times, primarily driven by market expectations of an imminent price increase. The anticipated price hike of INR 2,000-3,000/t for the 65-16 grade, currently hovering at INR 83,000/t exw Durgapur/Vizag, has fuelled this buying activity. Contributing factors include rising costs of imported manganese ore due to supply constraints in major producing regions such as Australia and Gabon. Additionally, the near-full capacity utilisation of smelters has limited their ability to meet increasing demand.

Imported manganese ore price scenario - Australian high-grade manganese ore (46%) prices remained stable w-o-w at $9.7/dmtu. Gabonese high-grade manganese ore (44%) is priced at $9.1/dmtu, stable w-o-w. South African lumps (Mn 37%) prices reached a 2-month low of $4.45/dmtu, down by $0.20/dmtu

Outlook

The silico manganese market is anticipated to exhibit short-term price volatility. While stable manganese ore prices offer a degree of support to production costs, the overarching influence of subdued demand, both domestically and internationally, is likely to exert downward pressure on prices.

To navigate this uncertain market environment, close monitoring of key indicators such as manganese ore prices, steel production levels, and global trade activity is essential for industry participants.