India: Limited exports, increased supplies keep silico manganese prices under pressure

Prices for silico manganese in India fell amidst lower export bookings and improved supplies in the domestic market.

As per SteelMint assessment, silico manganese offers in Raipur were at around INR 71,000/tonne (t) exw, steady w-o-w. Prices in Vizag touched INR 71,300 t exw, and in Durgapur were at INR 70,400/t, stable w-o-w.

Producers' quotes for grade 60-14 remained at around INR 71,000-71,500/t exw in Raipur and Vizag. On the other hand, Durgapur producers were seen quoting at around INR 70,500-71,000/t exw. However, traders offered at around INR 69,500-70,500/t exw in Raipur, Vizag, and Durgapur amid weak demand.

Prices for lower-grade manganese ore have been declining for a while, especially for Mn37% (South African origin), since 9 December, 2019, has dropped to a 3.5-year low, allowing buyers to benefit from lower prices. In addition, prices for silico manganese fell in several domestic bulk sales.

SteelMint recorded trade volumes of around 3,600 t of manganese alloys in the domestic market this week.

Factors weighing on prices

• Production at a few new facilities has lately increased, and domestic silico manganese production has been improving in the Raigarh and Raipur region.
  
  
• Silico manganese exports from India have come down from 124,010t in March to 108,975t in April. Given lower bookings, the numbers are likely to drop in May-June. This has esulted in diversion of volumes to the domestic market.
  
  
• Silico manganese prices have been influenced globally by high inflation and low liquidity, which have also influenced domestic pricing. There was lack of demand both locally and abroad.
  
  
• Due to lack of demand and fluctuating raw material prices, the Indian steel market remained sluggish. As a result, numerous consumers decided to hold off booking bulk volumes until spot demand and prices continued started to fall. On 20 June, SteelMint's domestic steel billet index was at INR 43,600/t exw-Raipur, down INR 300/t w-o-w.
  
  

Outlook
There is increased inventory pressure on silico manganese, resulting in weak spot prices. In the short term, prices are expected to remain firm. But despite the negative sentiment, the market is still cautiously optimistic.

In Andhra Pradesh, 12 ferro alloy producers derated, resulting in a capacity reduction of 16,720 KVA from a total capacity of 446,000 KVA. A factory has confirmed a deration application, while nine producers have decided to close temporarily owing to increased costs. This may lead to tighter supplies in the near term and, therefore, support prices.