India: Silico manganese prices fall on selling pressure ahead of fiscal year-end

Domestic silico manganese prices dropped on sluggish demand last week, with pressure on sellers to clear their books as the current fiscal draws to a close, thereby pulling prices down further. However, while traders are lowering prices in the hope of making brisk sales, not all manufacturers are willing to sell at a lower price.

As per SteelMint's assessment on 28 Mar'22, Raipur and Durgapur-based producers kept silico manganese offers at around INR 112,000/t exw. In the export market, suppliers are offering at around $1,535/t for 60-14 grade, down $15/t w-o-w, while prices for 65-16 grade have been assessed as having fallen by $30/t w-o-w to $1,700/t FOB in order to maintain parity with domestic prices.

Why prices edged down?

Commodity volatility impacts domestic demand: Lack of demand enquiries in an uncertain market characterised by high volatility in commodity prices pressured traders to sell off material by slashing prices, although buyers are in a wait-and-watch mode waiting for price rationality to return to the market.

• Raw material prices edge lower: Manganese ore prices have dropped marginally but the prices of coking coal and coke are still at record highs, not to forget steep freight costs. Therefore, export market sentiments are still strong even as a drop in ore prices has led to offers softening somewhat.
  Export enquiries shift for time being: Export enquiries have shifted to other countries due to competitive counter prices being quoted by sellers in other countries, which led to a slowdown in demand for silico manganese.
  
  
• Downtrends in domestic steel market: The steel market has witnessed a downtrend due lack of demand and enquiries, fall in raw material prices and selling pressure in the market.
  
  

China Market

China's silico manganese (60-14) prices were recorded stable at RMB 7,750/t ($1,203/t) exw Inner Mongolia, while 65-17 grade material is being offered at RMB 8,445/t exw Inner Mongolia. In the short term, it is expected that the silico manganese market will likely witness stable prices and average shipments.

Outlook

Silico manganese producers are optimistic despite the downtrend in prices, as they are anticipating that prices might correct in the near term once state-run miner MOIL declares prices shortly.

Meanwhile, a major Malaysian producer has kept operations on hold for the time being due to technical issues and export enquiries, may therefore, shift to India.