India: Silico manganese prices fall further as buyers become cautious

Silico manganese prices fell due to supply-demand disparity. Domestic sellers reduced prices to entice consumers. However, buyers were cautious of purchasing because they expected further reduction in offers. Meanwhile, SteelMint has recorded trade of around 2,500 tonnes (t) amid low demand.

As per SteelMint's assessment, Raipur- and Durgapur-based producers offered material at around INR 73,800/t exw, which edged down by 1% w-o-w. Producers' quotes for grade 60-14 remained at around INR 74,000-75,000/t exw-Raipur. On the other hand, Durgapur producers were seen quoting at around INR 73,500-74,000/t exw. Traders offered at around INR 73,500/t exw in both Raipur and Durgapur amid softening demand.

Responding to overseas enquiries, exporters offered at around $922/t FOB for 60-14 grade. Offers edged down by 1% w-o-w. Prices for 65-16 grade were assessed at $1,018/t FOB, dropping w-o-w. Prices fell amid limited export inquiries. Moreover, bearish market trends persisted globally, dragging prices down. SteelMint recorded trade volumes of around 1,200 t in the export market amid muted demand.

Reasons behind decline in prices

• Supply-demand mismatch: Indian producers experienced lack of demand in the spot market. Producers were mulling price hikes due to increasing production costs led by an upsurge in raw materials and fuel prices. However, looking at lower demand in the market, they decided to keep offers nominal to normalise trends. As a result of stockpiling of materials in the domestic market, silico manganese prices decreased. Additionally, several producers withheld their offers in expectation of further price hikes following Easter and Ramadan vacations.
  
  
• Low bids sought by overseas buyers: Lack of buying interest and uncertain market conditions resulted in limited international enquiries. Compared to offers, seaborne buyers sought material at much lower prices. However, it was difficult for smelters to sell material at such low prices, which led to low export transactions. Consequently, prices inched down.
  
  
• Manganese ore prices fall: Low demand for manganese alloys forced production cuts by smelters in the domestic market and contributed to the reduction of manganese ore prices, which impacted silico manganese prices in turn. Imported manganese ore of Mn37% grade (of South African-origin) was being offered at $4.2/dmtu CNF East Coast, down by 1% w-o-w. The Mn46% grade (of Australian origin) was offered at $5.45/dmtu CNF Vizag, according to SteelMint's assessment.
  
  
• Steel demand remains sluggish: The Indian steel market was sluggish due to lack of demand and fluctuating raw material prices. As a result, many customers preferred to wait and see whether spot demand and prices would continue to weaken before reserving bulk volumes. SteelMint's domestic steel billet index was at INR 44,900/t exw-Raipur on 25 April, down INR 758/t w-o-w.
  
  

Outlook

Demand for manganese alloys has declined due to low steel demand. However, with constrained manufacturing, India's supply of manganese alloys has declined. As a result, silico manganese prices may witness mixed trends in the near future.