India: Festive outlook, China output cuts lift silico manganese prices

Domestic prices of silico manganese, which had been declining for a couple of weeks, are now showing an uptrend. The reason behind the price rise is speculation among producers that demand may revive in the upcoming festive season.

As per SteelMint's assessment, Durgapur producers have started offering at INR 94,600/t exw - up by around INR 4,400/t w-o-w, while in Raipur, offers have increased by INR 4,800/t w-o-w to INR 95,850/t exw. Some producers are even trying to push for higher prices amid the sharp hike in ferro silicon prices.

Upcoming tenders keep producers optimistic
Many manganese alloys tenders are in the pipeline from the government and some major steel producers in the upcoming month. Due to volatility in the silico manganese market, the major steel mills are more focused on securing their bookings through tenders. This may be the reason for shortage in the spot market, which is also lifting the outlook in silico manganese offers.

Hike in coke prices
Indian met coke prices continue to rise relentlessly owing to supply tightness and high imported coking coal prices. The prices of met coke surged by INR 6,000-8,000/t w-o-w to INR 48,000-49,000/t exw India's east-coast. As a result, silico manganese smelters are having to raise silico manganese offers, having got a chance to do so. However, buyers are showing reluctance in booking large volumes.

Price increase in China drives sentiments
Output cuts in key silico manganese producing provinces in China are strengthening silico manganese prices. Silico manganese prices in China also spiked after futures prices of the material lifted to record highs due to the supply shortage. This further supported an increase in Chinese port-side manganese ore prices. Strong international prices are inspiring the Indian producers to increase offers of silico manganese in the Indian market to maintain the price parity.

Outlook
The soaring ferro alloys market is encouraging silico manganese sentiments to move up. It is expected that seaborne inquiries may also pick up in the upcoming month, giving hope to the smelters of further price upticks.