India: Silico manganese prices inch down on market sluggishness

• Narrow profit margins restrict decisions on further price cuts
  
  
• Limited trades, fall in steel prices weigh on silico manganese bids
  
  

Domestic silico manganese prices have continued to decline w-o-w, with the market facing a prolonged downturn due to reduced trades, shrinking profit margins, and weakening demand.

According to BigMint's assessment, the price range of silico manganese (60-14) in India decreased compared to the previous assessment on 10 September 2024. As of 17 September, prices ranged between INR 65,500-65,800/tonne (t) ($783-786/t) ex-works in the major markets of Durgapur, Raipur, and Vizag, down by INR 500-700/t ($6-$8/t).

Confirmed deals (as per BigMint)

Market overview

Shrinking profit margins: Major smelters in key production regions faced challenges in managing production costs, leading to shrinking profit margins. Higher operational expenses and market pressures made it difficult for these producers to maintain profitability, causing their profit margins to erode. This financial strain reflects the ongoing struggle within the industry to balance operational costs with the demands of a competitive market.

Imported manganese ore prices fall again: Prices of imported manganese ore (Mn 37-46%) saw a w-o-w decline. Mn44% from Gabon dropped by $1/dry metric tonne unit (dmtu) to $5.05/dmtu, while Mn46% from Australia fell by $1.05/dmtu to $5.4/dmtu CIF India. Mn37% from South Africa also decreased, dipping by $0.1/dmtu to $3.9/dmtu.

The drop in manganese ore prices has prompted buyers to anticipate additional decreases in silico manganese prices. This trend suggests a potential downward pressure on the market, as lower raw material costs typically translate to reduced prices of manganese alloys.

Slow overseas demand weigh on silico manganese exports: BigMint's assessment on 16 September 2024 indicated a declining trend in silico manganese prices. The 65-16 grade SiMn fell by $16/tonne w-o-w to $912/t FOB, while the 60-14 grade decreased by $5/t to $810/t FOB. This downward movement was driven by ongoing weak demand, forcing producers to lower prices.

Billet prices stable w-o-w: BigMint's steel billet index, a key benchmark in India, inched up by INR 150/t to INR 37,550/t ($449/t) exw-Raipur on 18 September. The price stability was attributed to a slight increase in inquiries. However, it is important to note that there is resistance towards this modest price increase, with some buyers hesitant to accept that higher prices despite the market's recent steadiness.

Outlook

The Indian domestic silico manganese market is anticipated to experience short-term fluctuations. Weak export demand, reduced profit margins, and falling imported ore prices are expected to drive a modest decline in prices. These factors combined suggest a slight downtrend given the softening manganese ore demand and overseas demand for alloys.