India: Silico manganese demand continues to remain lacklustre, prices drop further

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 5500 t amid low demand.

According to SteelMint assessment, Raipur-based producers offered at around INR 112,770/t exw while prices in Durgapur reduced by INR 3,750 to INR 108,250/t exw.

Exporters are offering at around $1,520/t for 60-14 grade, down by $15/t from last week, while prices for the 65-16 grade are assessed at $1,1610/t FOB India, down $90/t.

Reasons behind decline in domestic 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 the lower demand in the market, they decided to keep a nominal offer price in the domestic market to normalise the 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 alongside delayed deliveries of previous bookings at ports, as few of Dec'21 orders are yet to arrive due to limited shipment via Black Sea route.
  
  
• Indian steel market volatile: The steel market in India exhibited volatile sentiments last week due to a gradual increase in inventories of domestic mills, and a lack of buying enquiries owing to uncertain market trends. Indian steel prices are expected see corrections in the short-term.
  
  

China market overview

China's silico manganese (60-14) prices fell by RMB 50 to RMB 7,700/t ($1,210/t) exw Inner Mongolia, while 65-17 grade material is being offered at RMB 8,395/t ($1319/t) exw Inner Mongolia. A marginal fall in commodity prices due to tight coal supply, reduced production by few mills and supply shortage in the Chinese market.

Outlook

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