India: Silico manganese export prices remain under pressure on subdued trades

• Global buyers cut down demand amid market uncertainty
  
  
• Prices drop $5 w-o-w, bid-offer disparity limits trades
  
  

Despite a general downturn in the global market for silico manganese, Indian exporters have demonstrated resilience in maintaining relatively stable prices.

BigMint's assessment on 9 September 2024 has shown constant trend: the 65-16 grade SiMn remained firm with prices edging down by $2/t to $928/t FOB, while the 60-14 grade dropped $5/t to $815/t FOB. Major producers in Vizag and Raipur were compelled to keep their silico manganese 65-16 grade prices nearly flat, within an FOB range of $930-$935/t, owing to weak overseas demand.

Confirmed deals

Market overview -

Temporary inventory adjustments by overseas buyers: Overseas buyers have reduced their consumption volumes due to economic uncertainty, changes in production plans and elevated energy costs in regions like Europe. Also, the global steel market, affected by geopolitical tensions and limited demand, has further limited consumption.

Indian players curtail output: Key Indian smelters in Durgapur, Raipur, and Vizag have curtailed production by 30-40% due to a decline in overseas inquiries. Fluctuating prices of imported manganese ore have exerted pressure on sellers, with asking rates from overseas buyers falling to around $890-910/t FOB India for high-grade SiMn 65-16.

Manganese ore prices drop further: The fluctuating cost of high-grade imported manganese ore (Mn 44 and 46%), a critical input for producing export-grade silico manganese, has eroded profit margins, prompting these smelters to reduce output. A recent announcement from a Camilog major manganese ore exporter, lowering October 2024 shipment prices to China by $1/dmtuCIF to $5/dmtu (Mn 44.5% Gabonese lump), could potentially influence domestic manganese ore prices and, consequently, the pricing of Chinese silico manganese.

Additionally, the supply constraints arising from reduced production in India have limited the availability of alternative sources for silico manganese in the global market.

Some Indian exporters are booked till October 2024 on long-term contracts with overseas buyers that include price clauses or minimum purchase quantities. These contracts had provided a degree of stability to export prices.

Chinese silico manganese market remains steady w-o-w: Silico manganese prices in China exhibited stability during the past week, trading within a narrow range of RMB 5,970-6,350 per tonne ($838-$892 per tonne) ex-works, including taxes. Market participants adopted a cautious stance, awaiting further developments. The market has adopted a cautious stance, with participants adopting a "wait-and-see" approach.

Outlook

Given the current market conditions, Indian silico manganese export prices are likely to experience fluctuations in the near term. The combination of soft imported ore prices and limited demand from overseas buyers is creating a challenging environment for exporters.

However, if domestic producers continue to curtail production in response to weak demand, it could lead to tighter supply and potentially support higher export prices.