India: Silico manganese prices drop to 1-month low

• Increase in domestic supplies weighs on prices
  
  
• MOIL rolls over offers for Mar'24, raises prices for low-grade
  
  

This week, the price of silico manganese in India fell by INR 630/t ($8/t). Prices are hovering at a one-month low, as per BigMint data. Prices of silico manganese in Raipur touched INR 66,900/t exw ($807/t), down INR 700/t ($9/t) w-o-w. Prices declined by INR 700/t ($9/t) w-o-w to INR 66,800/t exw ($806/t). Prices in Vizag declined by INR 500/t ($6/t), to INR 67,200/t ($811/t).

Sluggish demand for silico manganese in both domestic and overseas markets particularly in Southeast Asia, Japan, and Europe caused this fall. Also, rise in domestic supply, due to the increasing output of several plants in Raipur and Vizag has resulted in an excess of silico manganese supply in the domestic market. The combination of increasing supply and poor demand has caused domestic prices to decline.

"Based on MOIL's price revision, I think prices will stay in the range of INR 67,000-67,500 exw Durgapur. The domestic cost of production has also increased by INR 1,000/t ($12/t). However, there has been a slowdown in international enquiries, and aggressive bidding from buyers has increased pressure on domestic vendors to reduce prices", a Raipur-based source informed BigMint.

Factors impacting prices

Surplus supply pressuring prices down: Domestic silico manganese prices in India have decreased due to a significant increase in supply. Several plants in Raipur and Vizag regions have begun operating 20-30 MVA furnaces, capable of producing 2,700-4,100 tons per month. This surge in production has created an oversupply of silico manganese in the domestic market amid limited demand. As a result, sellers are lowering their offerings to manage excess inventory, leading to a price decline.

Cost-effective landed offers: Manufacturers from Raigarh and Odisha quoted offers ranging from INR 66,000-67,000/t ($796-$808/t), ensuring market price sturdiness, Few other merchants provided lower rates, making the players cautious to accept higher offers in key producing region like Raipur, Durgapur and Vizag. Also, lower offers from some traders created some hesitation in the market, preventing widespread acceptance of higher quotes. However, major players are seen offering in the range of INR 67,500-68,200/t ($826-$838).

Export prices drop $10/t - Silico manganese export prices dropped this week owing to surplus supply and limited demand from the overseas markets. According to BigMint's assessment on 4 March 2024, the 60-14 grade was assessed at $820/t FOB, down $8/t, while 65-16 grade prices were at $920/t FOB, down $20/t.

Outlook

Silico manganese prices are expected to fall slightly in the near term, as steel prices have become more volatile recently. According to BigMint's analysis, weaker export enquiries and fewer bids from the majority of participants will cause prices to fall slightly.