India: Silico manganese export prices drop by $15/t amid surplus supply, weak demand

• Chinese exporters adopt aggressive pricing strategy
  
  
• Demand from Europe shows no signs of recovery

  
  
  

Indian silico manganese export offers fell marginally by approximately $15/tonne (t) w-o-w, primarily due to weak global demand and surplus supply. These factors, along with Chinese exporters' aggressively low offers, have led to bearish sentiments dominating the market.

BigMint's assessment on 18 November 2024 revealed relatively stable prices: the 65-16 grade edged down by $8/t to $890/t FOB, while the 60-14 variant inched down by $17/t to $798/t FOB. Higher offers for 65-16 did not find acceptance, and sellers were compelled to knock their offers down to $880-900/t FOB.

Confirmed deals (as per BigMint)

Key factors impacting export prices

Supply-demand gap weighs on market: A global supply surplus, coupled with declining demand due to falling overseas crude steel production, has exerted considerable pressure on Indian exporters and smelters. This compelled them to reduce prices this week, to maintain competitiveness in the international market.

China adopts aggressive silico manganese pricing: Chinese exporters are offering silico manganese at steep discounts, which has effectively reduced their prices to $760-775/t FOB China (60-14 grade), squeezing profit margins for global producers. Domestically, Chinese silico manganese prices dropped by RMB 120/t ($17/t) w-o-w to RMB 6,110-6,510/t ($845-$899/t) exw, including taxes, amid weak downstream demand and the off-season slump. Bearish sentiments prevail in the market.

Demand from Europe remains weak: In Europe, a key export market for India, economic uncertainties and weak steel demand have reduced silico manganese consumption. The downtrend is expected to continue. According to The Economic and Steel Market Outlook, 2024-25, the European Union's apparent steel consumption is now projected to decline by 1.8%, revised from a 1.4% growth, due to "poor developments in the industrial outlook and decreasing demand from steel-using sectors, particularly construction and automotive". The report notes, "The overall evolution of steel demand remains subject to high uncertainty."

Global manganese ore prices rise despite soft demand: Imported manganese ore prices edged up despite weak manganese alloy demand, as global miners raised rates to offset losses. Key importers such as China and India scaled back purchases. Gabonese Mn44% rose by $0.05/dry metric tonne unit (dmtu) to $4.10/dmtu, South African Mn37% increased by $0.10/dmtu to $4/dmtu, while Australian Mn46% was stable at $4.40/dmtu CIF India.

Outlook

Indian silico manganese export prices might decline in the near term due to weak global steel demand and ample inventories. Rising manganese ore prices could offer some support, but the short-term outlook remains uncertain.