India: Silico manganese price rise sharply w-o-w amid panic buying

Indian silico manganese prices rose sharply w-o-w due to panic buying in the domestic market on a rise in export enquiries. Domestic buying rose on concerns that prices would rise further as export enquiries overflowed. The Russia-Ukraine war is leading to uncertainty and a resultant scramble to secure material.

According to SteelMint's assessment on 7 Mar'22, Raipur-based producers offered at around INR 128,000/t exw-basis while prices from Durgapur were at INR 124,600/t exw.
Increasing export inquiries helped silico manganese to climb further. Exporters are offering at around $1,650/t for 60-14 grade and $1,775/t for 65-16 on FOB India basis.

Factors supporting the price rise in domestic market:

• Increased domestic demand: Silico manganese demand has risen as buyers are in fear of a further hike in prices amid the Russia-Ukrain conflict. There is panic-led buying.
  
  
• Export inquiries up: Ukraine exported good volumes of silico manganese and these import inquiries have now shifted to India, boosting export offers. However, high container costs and delays in shipment are keeping buyers from booking material. Meanwhile, reduced stock at steel mills compelled them to book material. This is resulting in a hike in export prices on a daily basis.
  
  
• Increased raw material costs: Manganese ore and coke (key inputs in making manganese alloys) prices have spiralled up due to supply disruptions amid the global crises. The rise in production costs is forcing producers to raise offers.
  
  
• Steel prices remain high: Indian steel prices remained on the higher side with marginal corrections w-o-w due to adequate demand. Soaring raw material prices are supporting the elevated prices. Consequently, this is supporting silico manganese prices.
  
  

Chinese market review
The market sentiment is positive. Manufacturers' offers continue to rise despite the high quantity of silicon manganese inventory with mills. China's silico manganese (60-14) prices are at around RMB 7,600/t ($1,203/t) exw-Inner Mongolia while 65-17 grade are being offered at RMB 8,475/t ($1,342/t) exw -Inner Mongolia. Due to rising raw material prices, silicon-manganese production cost will also increase, resulting in solid quotations from manufacturers.

Outlook
The Indian silico manganese prices are expected to remain on the higher side in the near term as producers are expecting good export inquiries in the coming weeks as supply disruptions from Ukrain-Russia will persist even If the war ends.

In addition, some producers are expecting prices to go up to INR 150,000/t exw but it is difficult to forecast as buyers are not booking at INR 130,000/t levels.