India: Silico manganese prices hit all-time high on rising buying interest

Indian silico manganese prices are holding on to the strong momentum w-o-w, reaching a record high amidst bullish sentiments. Producers are increasing their offers on an intra-day basis owing to improving inquiries and in their race to maintain parity with increased global prices of silico manganese.

Buyers are sceptical about the escalating prices and are scrambling to procure more of the material before any further hike is effected.

As per SteelMint's assessment, Indian silico manganese offers registered a record high level of INR 118,750/tonne (t) exw-Raipur.
Durgapur producers are offering at INR 117,750/t exw for the 60-14 grade.

Higher power costs influencing prices
Increasing prices of domestic and imported coal due to supply shortage is expected to translate into costlier power in future, which might increase the cost of production of silico manganese. Around 4,000 kWh of power is consumed to produce one tonne of silico manganese. According to the Indian Electricity Exchange (IEX), energy prices in the day-ahead market have surged by 269% to INR 11.8/unit on 5 Oct'21 as against INR 3.2/unit on the same date last month.

India's coal producing behemoth Coal India Limited (CIL), is more focused on supplying to the power sector which is leading to low coal inventory at the captive power plants. As a result, an increase in the cost of production due to the high cost of electricity is likely to elevate further the prices of silico manganese in the spot market.

Ukraine production cuts spike exports inquiries
According to sources, some of Ukraine's largest producers had to reduce silico manganese production as the National Commission for State Regulation of Energy and Public Utilities (NKREKP) decided to increase electricity tariffs starting Aug'21. Due to short supply, Ukraine-based buyers are likely to search for new markets for silico manganese which could signal hope for Indian sellers.

High coke prices lift offers
Silico manganese producers were waiting to grab the opportunity to increase their offers and high coke prices gave the chance to do so. However, a meagre quantity of coke of around 125-135 kg is required to produce 1 tonne of silico manganese . Despite that, producers are reluctant to buy high-rated coke which further reflected the low coke inventory at the smelters, which is somewhere supporting the hike in silico manganese prices.

Outlook
Indian steel prices have risen as steel producers are expecting the ongoing festive season to fuel robust demand. This sentiment is further supporting the prices and demand of silico manganese. Moreover, production cuts worldwide due to environment norms and high electricity costs are expected to increase export demand of silico manganese from India.