India: Silico manganese price edge up after 2-month gap

Indian silico manganese producers attempted to raise offers following a two months of decline, given the price hike in semi-finished steel and the expectation of supply shortage in the local market. This price upswing has been bolstered by a surge in steel demand and domestic prices. Notably, prices have been on a negative trajectory since mid-June'23.

Additionally, manufacturers have faced narrowing profit margins due to material costs falling below production expenses, causing them to resist further reductions.

According to SteelMint's assessment, silico manganese prices in Raipur are currently at INR 66,700/t exw, up 1% w-o-w. Meanwhile, prices in Vizag reached INR 67,100/t exw. In Durgapur, producers held offers steady at INR 66,300/t exw.
Although producers' quotes for grade 60-14 increased slightly to around INR 66,500-67,000/t exw in Durgapur, Raipur, and Vizag. However, traders' offers were slightly lower at INR 65,500-66,000/t exw in all three locations due to lower bids.

Factors affecting prices:

• Supply-demand discrepancy: Notably, domestic products have been in high demand on the spot market. In response, several producers have sought to increase prices, considering that last week's prices dipped below production costs. The assumption is that prices will rise in the short term due to supply constraints caused by production cutbacks in the south India, a consequence of higher electricity tariffs.
  
  
• Marginal rise in steel prices: The marginal increase in steel prices, driven by bulk bookings in the domestic market and rising steel raw material costs, kept silico manganese prices supported. As of August 8, SteelMint's daily steel billet index stood at INR 42,000/t, marking a week-on-week increase of INR 700 per tonne (exw-Raipur).
  
  

Outlook
Prices for silico manganese may remain stable in the near term. With the slight increase in steel prices, the industry remains optimistic about growth in demand, and suppliers' current willingness to boost prices is also very clear.