India: Silico manganese prices decline amid liquidity challenges

India's silico manganese prices declined marginally because of liquidity issues. Sellers were willing to clear inventory at lower prices so that they could reduce the high selling pressure. Resultantly, silico manganese prices kept on downtrending amid low inquiries from both domestic and exports markets.
As per SteelMint's assessment on 18 July 2022, Raipur-based producers offered the material at INR 80,800/t exw, a fall of INR 1,450/t w-o-w while prices in Durgapur dropped by INR 2,100/t to INR 78,900/t exw.
Responding to overseas inquiries, exporters offered the 60-14 grade material at $1,030/t, a drop of $5/t. The 65-16 grade was stable at $1,150/t FOB India. SteelMint recorded trade volumes of around 3,000 t this week.

Factors keeping silico manganese prices down

• Liquidity crisis prompts destocking of material: A liquidity crises prompted sellers to destock material at lower prices, so that they could clear their inventory for the monthly expenditure amid panic selling pressure. This scenario kept silico manganese prices on the lower side.
  
  
• Export prices may be affected by exchange rates: A depreciation of the Indian rupee (INR) against the US dollar (USD) is likely to affect export prices for seaborne buyers. Thus, Indian smelters received lower rates for Indian manganese alloys in the export market.
  In addition, overseas buyers are receiving lower offers from Europe's ferro alloys producers, which further helped to keep the Indian export offers down.
  Also, some producers have started lowering production of manganese alloys owing to uncertain sentiments and low demand in the domestic market.
  
  
• Steel prices downtrend amid modest demand: The downtrend in steel prices was driven by slower demand and fluctuation in domestic prices, which impacted the procurement cycles of distributors and stockists. The slowdown in the steel market also lowered prices of silico manganese.
  
  

China market overview
Silico manganese (60-14) prices in China were down by RMB 450/t at RMB 67,00/t ($ 993/t) exw-Inner Mongolia, while the 65-17 grade was down by RMB -500/t at RMB 7,500/t ($1,193/t) exw-Inner Mongolia. Manganese alloys domestic demand and supply have been reduced amid unstable sentiments which forced manufacturers to wait and watch.
Meanwhile, silico manganese futures on the Zhengzhou Commodity Exchange (ZCE) for September 2022 delivery recorded a fall w-o-w to settle at RMB 7,138/t on 19 July 2022.

Outlook
Prices of silico manganese might remain weak in the short term. Market trends will continue to influence supply and demand.