India: Silico manganese prices plunge, market awaits MOIL's price revision
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- Manganese alloys prices see a downtrend
- Weakening steel prices lower bids for manganese alloys
Domestic silico manganese prices in India fell this week. Surplus supply in the market due to limited export demand and diversions in the domestic market pulled prices down w-o-w by INR 3,500/t ($42/t) in key regions.
BigMint's assessment on 25 June exhibited a sharp decline in prices by around INR 3,200-3,850/t ($38-$46/t) for grade 60-14 silico manganese. Prices fell by INR 3,200-3,850/t ($ 38-46/t) across key regions like Raipur, Durgapur, and Vishakhapatnam. This decline brings prices to around INR 77,000-78,500/t (USD 921-940/t) ex-works, near a two-month low according to BigMint's data.
Confirmed deals (as per BigMint)
Factors impacting domestic prices
Diversions of export supplies in the domestic market: Muted export demand and container shortages are causing diversions of silico manganese in the Indian domestic market. Several key exporters have diverted material originally intended for export to the domestic market at discounted rates (around INR 75,500-76,500/t exw) due to shipment delays and container scarcity. This has put pressure on established market offers, particularly in Durgapur. Additionally, Raipur smelters have lowered their offers to remain competitive amidst squeezed margins on material costs.
Silico manganese export prices remain under pressure: Indian silico manganese exporters are grappling with a confluence of challenges, leading to a decline in export activity and potential domestic market impacts. BigMint's assessments on 24 June, 2024 revealed a significant drop in export offers, with both grades (60-14 and 65-16) experiencing a w-o-w decline of $46-48/t FOB. Weak demand in the global market, coupled with a shortage of shipping containers, are hindering export activity and putting downward pressure on domestic prices.
Fall in billet prices w-o-w: BigMint reported a significant decline in its steel billet index today. On 26 June, 2024, the index fell by INR 2,100/t (USD $25/t) to settle at INR 39,650/t (USD $475/t) exw-Raipur, its lowest point in four months. This substantial drop underscores ongoing market pressures. Subdued demand and weakening sentiment are evident across both finished and semi-finished steel, leading to sluggish activity and a lacklustre performance. Furthermore, a negative correction in the market for supporting commodities has exerted additional downward pressure on billet prices.
Outlook
Domestic silico manganese prices might see a price correction in the near term. Weakening domestic demand and a declining steel billet index suggest downward pressure. However, the arrival of high-priced imported ore and MOIL's July price announcement could influence price movements further.