India: Silico manganese prices inch up as power tariffs rise

Silico manganese prices are increasing in the domestic market due to rising electric tariffs. As per SteelMint's assessment, offers in the Raipur market stood at around INR 75,800/t exw, up 4% w-o-w, while in Durgapur prices were at 75,600/t exw, an increase of 5% w-o-w.

Meanwhile, producers' quotes for grade 60-14 remained at around INR 76,000-77,000/t exw Raipur. On the other hand, Durgapur producers quoted at INR 75,000/t-76,500/t exw. However, traders offered at around INR 74,500-75,500/t exw in both Raipur and Durgapur amid limited demand.

During the week, SteelMint recorded trade volumes of around 2,500 tonnes (t) of manganese alloys in the domestic market.

Silico manganese export offers stood at around $940/t FOB for 60-14 grade, up $60/t from last week, while prices for 65-16 grade were assessed at $1,040/t FOB, up by $50/t w-o-w.
Total exports stood at 4,800 t amid weak demand.

Power tariffs driving up prices: Manganese alloys manufacturers are facing high electricity tariffs in major production hubs such as Andhra Pradesh, where the power tariff has been raised from 4.95 kVAh to 7.40 kVAh, and Raipur, where the tariff has been raised from INR 5.45 kVAh to INR 5.70 kVAh, leaving the producers with no choice but to raise prices.

Furthermore, high tariffs have increased the fixed cost of producing silico manganese, which mills cannot avoid, and the current cost of manufacturing is around INR 78,000/t. Mills have no option but to suspend production because higher energy tariff is unfeasible, according to sources.

Steel market overview: Domestic steel demand remained moderate last week with limited enquiries and bookings. SteelMint's daily steel billet index was assessed at INR 46,300 exw-Raipur /tonne (t) up INR 167/ t w-o-w on 4 April 2023.

Outlook
Silico manganese prices may trend higher in the short-term due to rising fixed costs and electricity tariff. Material costs may fluctuate further if export enquiries and steel demand rise.