India: Silico manganese prices continue to fall. What factors are driving decline?

• Domestic prices hover at over 1.5 month lows
  
  
• Lower offers from China, Vietnam play spoilsport
  
  

This week, the price of silico manganese(60-14) in India fell further by INR 500- 700/t ($6-8/t) w-o-w to touch INR 65,900-66,500 /t exw ($796-803/t) in the key producing regions of Durgapur, Raipur and Vizag. The premium grade of silico manganese (60-15) was offered at around INR 66,500-67,300/t ($803-812/t) exw in Durgapur and Raipur. Prices are touching a one-and-a-half month lows.

Factors impacting prices

Weak domestic demand impacts export prices: Indian silico manganese prices are under pressure due to weak domestic demand and increased competition from overseas suppliers. Both factors are causing a slight decline in export prices. Domestic producers are adjusting their offers accordingly. Uncertainties in steel prices have led steel mills to adopt a cautious approach, resulting in lower bookings and reduced silico manganese consumption.

Supply glut exerts selling pressure: Furthermore, key smelters in the domestic market resumed production after prices rose to INR 68,000-68,500/t exw in end-February, and positive inquiries from the export market in the initial days of March created an illusion of high demand, which led to a supply glut. This has exerted some selling pressure on the smelters and resulted in their reduced offers.

A Raipur-based producer informed BigMint that rising manganese ore prices have not had much impact on production costs, as the Indian rupee (INR) is also appreciating against the dollar which is covering the increased costs of bulk bookings of imported manganese ore. However, the lower offers from Raigarh and Durgapur have majorly set the cue for the lower domestic prices and many small smelters are under selling pressure in order to meet their monthly expenses.

Lower export prices: Indian smelters reduced prices to match international levels amidst surplus and overseas competition. In Durgapur and Raigarh, producers offered between INR 65,500 - 66,000/t ($791-803/t) ex-works. Some transactions at INR 65,000/t ($785/t) ex-works further pressured sellers to stay competitive. Additionally, attractive pricing from China and Vietnam enticed importers, leading to an oversupply of silico manganese in the Indian market.

Export prices fell by $5/t for both grades of silico manganese. Export prices fell this week due to a glut and a lack of demand in overseas markets. According to BigMint's assessment on March 12, 2024, the 60-14 grade was assessed at $815/t FOB, down $5/t, and the 65-16 grade was rated at $915/t FOB, down $5/t.

Outlook

Prices might remain within the current range due to the revival in overseas inquiries for silico manganese. However, close monitoring of domestic demand, production volume, and imported ore prices is required to estimate the potential direction of silico manganese pricing.