India: Silico manganese export prices on verge of hitting 1-month low amid muted trade

• Egyptian currency depreciation hits imports from India
  
  
• Slump in Italian steel production impacts Indian exports
  
  

Indian silico manganese export prices have experienced a significant decline of $40/t over the past fortnight. This trend suggests a potential softening in global demand for the commodity.

According to BigMint's assessments on 27 May 2024, the 60-14 grade was at $1,068/t FOB, a decrease of $47/t w-o-w, and the 65-16 grade was at $1,180/t FOB, a drop of $40/t w-o-w. Prices are edging close to a one-month low. Furthermore, some major producers in Vizag and Raipur were offering 65-16 grade ex-Vizag/Haldia at $1,210-$1,220/t FOB.

"No significant export deals were seen in the last couple of weeks. Just some small parcels are getting concluded as major markets are not seen issuing firm bids," stated a manganese alloys exporter from eastern India.

Confirmed deals

Global market updates

Lower enquiries from Italy: Italian steel production fell by 10.6% y-o-y in April 2024, reaching 1.7 mnt, as per GMK Center. This decline continued from March, with a further 11% drop. Weakening global demand for steel and high energy costs are to blame. The impact is felt in reduced consumption of silico manganese from India. As per data maintained with BigMint, Italy's silico manganese imports from India plunged 18% m-o-m to 12,146 t in March. Notably, Italy is one of the key silico manganese export destinations.

Egyptian pound depreciation squeezes imports: Egypt, a major importer of various goods, is particularly vulnerable to currency fluctuations. The significant depreciation of the Egyptian pound since January 2022, by around 50% against the dollar, has severely impacted the country's import capacity. This currency devaluation has significantly constrained import capacity, impacting the purchase of crucial materials like manganese alloys, traditionally sourced from India. The weakened currency has resulted in a decline in purchasing power, exerting downward pressure on silico manganese prices.

Exporters grapple with weak demand, price pressure: Silico manganese exporters are facing a confluence of challenges in the current market. Weakening demand, particularly from the alloy steel sector, is forcing price cuts to liquidate existing stockpiles. This subdued global trading environment has further dampened buying activity. Enquiries from Indian ports for silico manganese at $1,050-1,070/t FOB (Vizag/Haldia) indicate downward pressure on export prices, with some deals concluded at these levels fuelling buyer expectations of further price reductions.

Despite a slight increase in imported manganese ore prices (around 0.07 dmtu/t CNF India) observed last week, signalling future price hikes, domestic ore prices remain stable. This contrasting trend suggests potential resilience in the supply chain or a cautious wait-and-see approach from other market players. The combination of weak demand and these mixed signals creates significant pressure on silico manganese export prices.

Outlook

Silico manganese exporters may lift offers due to increasing costs of imported raw materials. Eramet Comilog's price hike for manganese ore to China suggests similar increases for Indian imports, potentially raising production costs by $60-70/t for high-grade silico and ferro manganese.