India: Silico manganese demand continues to remain lacklustre amid higher raw material prices

Silico manganese demand in India continued to remain weak due to higher raw material prices. Indian sellers reduced prices to entice buying but users were reluctant to purchase products as they expect a further drop in prices. Meanwhile, SteelMint has recorded trade of around 2,200 tonnes (t) amid low demand.

As per SteelMint's assessment, Raipur- and Durgapur-based producers offered material at around INR 74,600-/t exw, which edged down by 2% w-o-w. Producers' quotes for grade 60-14 remained at around INR 74,000-75,000/t exw-Raipur. On the other hand, Durgapur producers were seen quoting at around INR 74,000-74,500/t exw. Traders offered at around INR 73,500/t exw in both Raipur and Durgapur amid softening demand.

Responding to overseas enquiries, exporters offered at around $930/t FOB for 60-14 grade. Offers edged down by 1% w-o-w. Prices for 65-16 grade were assessed at $1,033/t FOB, nearly stable w-o-w. Prices fell amid limited export inquiries and as bearish market trends persisted globally, which dragged prices down. SteelMint recorded trade volumes of around 1,200 t in the export market amid muted demand.

Reasons behind decline in demand

• Prices under pressure due to lack of demand: Producers were mulling price hikes due to increasing production costs led by an upsurge in raw materials and fuel prices. However, looking at lower demand in the market, they decided to keep a nominal offer in the domestic market to normalise trends.
  
  
• Lack of export enquiries: Export enquiries were limited as buyers were reluctant to purchase at a higher price. Indian silico manganese demand from the European region remained muted as consumers were expecting a further drop in prices.
  Furthermore, activity in the European ferro alloy market has decreased this week, placing an extra pressure on suppliers regardless of high offered volumes, according to sources.
  
  
• Steel prices in India fluctuate: The steel market in India exhibited fluctuation in prices across regions amid mixed market sentiments last week, and a lack of bulk buying enquiries owing to uncertain market trends. This has impacted silico manganese prices. SteelMint's daily steel billet index was assessed at INR 46,950/tonne (t) (up INR 650 w-o-w) exw-Raipur on 18 April.
  
  

Outlook

Amidst muted demand and higher raw material prices, silico manganese trade may continue to remain dull in the short term.