India: Silico manganese prices fall to 6-month low amid declining manganese ore prices

Silico manganese prices in the domestic market dropped marginally by 1% w-o-w this week. As per the latest assessment, offers stood at around INR 72,300/t exw-Raipur and INR 72,700 t exw-Vizag.

Notably, prices have fallen to a 6-month low for the Raipur region, as per data maintained with SteelMint. These levels were last seen in end November 2022.

The fall in prices can be attributed to declining imported manganese ore prices and low demand for manganese alloys at high offers.

Producers offered 60-14 grade at around INR 72,500-73,500/t exw in Raipur and Vizag while Durgapur producers quoted offers at INR 72,500-73,000/t exw. Meanwhile, traders offered at around INR 71,500-72,500/t exw amid weak domestic demand.

Deals of around 1,200 tonnes (t) of silico manganese and 500 t of ferro manganese were recorded in the domestic market this week. A few discounted bulk deals were also heard.

Factors keeping prices under pressure-

• Falling manganese ore prices: Production cuts by the smelters due to low demand for manganese alloys have weighed on manganese ore prices. Silico manganese prices also came under pressure with a fall in raw material prices. Meanwhile, imported manganese ore Mn37% grade (South African origin) was offered at $3.95/dmtu CNF east coast, down by 3% w-o-w. The Mn46% grade (Australian origin) was offered at $5.15/dmtu CNF Vizag.
  
  
• Low prices 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. This resulted in lesser export transactions which put pressure on domestic prices.
  
  
• Subdued steel demand: The Indian steel market was sluggish due to lack of demand and fluctuating raw materials 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 stood at INR 43,300/t exw-Raipur on 30 May, down INR 500/t w-o-w.
  
  

Outlook

Domestic silico manganese prices are less likely to improve in the near term as the manganese ore spot market is expected to continue remaining bearish. Furthermore, the market is awaiting MOIL's manganese ore price revision which may be announced in the next couple of days.