India: Rising steel prices, festive season demand lifts domestic silico manganese prices

• Export prices surge on supply-demand gap
  
  
• Volatility in prices expected in near term

  
  
  

According to BigMint's assessment on 7 October 2024, domestic prices of silico manganese 60-14 grade rose INR 2,400/tonne (t) ($29/t) w-o-w to INR 69,500-70,200/t ($827-835/t) exw, though some smelters in Raipur offered at INR 70,500-71,500/t ($840-$851/t) exw.

The premium grade (60-15) witnessed a slight hike to INR 72,000-72,500/t ($857-$863/t) exw in Durgapur and Raipur.

Rising steel prices and festive season demand primarily supported the price rise.

Confirmed deals (as per BigMint)

Market overview

Festive season fuels domestic buying: Indian steel mills have strategically increased their inventory levels ahead of the festive season. This move was driven by a combination of factors:

• Expectations of increased steel demand: The festive season typically brings a surge in demand for steel products. Expectations of this have prompted mills to build up inventory to ensure adequate supply.
  
  
• Concerns over rising silico manganese prices: The recent upward trend in silico manganese prices has raised concerns among steel mills about potential cost increases. Mills are stocking up on raw materials to mitigate the impact of future price rises.
  
  
• Smelter pricing strategy: Smelters have maintained relatively high asking prices at around INR 70,500/t ($840/t) exw-Raipur, in line with the challenging market conditions and the need to protect profit margins. Additionally, the use of higher-priced old inventory of imported manganese ore has put upward pressure on silico manganese prices. Moreover, output reductions have minimised the surplus supply in the market, further supporting the price rise.
  
  

Export prices surge on rising inquiries, supply constraints: The limited availability of exportable tonnage, due to domestic orders booked until mid-November 2024, has tightened supply and amplified the upward pressure on prices. Assessments by BigMint on 7 October 2024 revealed that the 60-14 grade stood at $851/t FOB, up $40/t w-o-w, and the 65-16 variant was at $938/t FOB, up $42/t w-o-w.

Major producers in Vizag and Raipur offered 65-16 at $950-$960/t FOB, further supporting the upward price trend. With regard to the seaborne market, there has been a surge in inquiries from key importers, including Japan, Taiwan, Turkey, and Italy. However, inquiries from the UAE and Egypt have remained stable.

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 800/t w-o-w) exw-Raipur on 9 October 2024. Buying activity in both the semi-finished and finished steel segments remained moderate during this week and supported the prices of steel. This, in turn, supported domestic silico manganese offers, which is a key alloying element in steel production.

Outlook

Domestic silico manganese prices might experience volatility in the near term, influenced by the fluctuating dynamics of the steel market. While the current levels may remain relatively stable, it is crucial to closely monitor global economic trends and steel production to assess the potential impact on future pricing.