India: Silico manganese prices remain stable despite need-based buying

• Waning demand weighs on domestic prices
  
  
• Market witnesses price divergence amid supply concerns
  
  

The Indian domestic silico manganese market witnessed price stability this week following a recent downturn. While demand remained subdued, reflecting a need-based purchasing approach, price variations emerged between producers.

This week, the price range of silico manganese (60-14) in India was firm compared to the previous assessment on 23 July. The price yesterday was in the range of INR 68,200-68,850 /t exw ($815-822/t) in the major markets of Durgapur, Raipur, and Vizag.

Premium grade of silico manganese (60-15) was available in Durgapur and Raipur for approximately INR 69,500-71,500/t ($830-853/t) exw.

Confirmed deals (as per BigMint)

Factors keeping prices stable

1. Competitive strategies in domestic market:

• Strategic discounts: To stimulate buying traders strategically offered silico manganese at lower prices compared to those offered by manufacturers in key regions. This tactic, while potentially increasing sales volumes in the short term, exerted downward pressure on overall prices.
  
  
• Pricing variations: Some manufacturers offered lower prices to stimulate demand, while others maintained higher price points due to limited supply. This divergence in pricing strategies indicates a cautious market sentiment and ongoing challenges faced by the industry.
  
  
• Production adjustments: Certain key producers in Raipur and Vizag have strategically reduced their output by 30-40% due to weak demand and downward pressure from merchants. By matching supply to current demand and preventing a possible glut in the domestic market, this strategy sought to retain profitability.
  
  

2. Constrained demand, buyer caution:

• Conflicting market signals: Uncertain market sentiment, with conflicting opinions on future price movements, led to cautious buying behaviour in both the local and export markets. This lack of robust demand, coupled with resistance to high prices amid declining imported ore prices, kept domestic silico manganese prices stable.
  
  
• Moderate steel demand: An atmosphere of caution in the domestic steel market driven by protests against electricity tariff hikes and limited bulk bookings contributed to price stability in the silico manganese market. Despite a slight uptick in the steel billet prices, overall demand remains subdued. BigMint's domestic steel billet index was assessed at INR 39,650/t exw-Raipur on 31 July 2024, up INR 800/t w-o-w.
  
  

Outlook

In the short term, a sharp upward revision in domestic silico manganese prices is unlikely. Small smelters dependent on the grid are reducing production due to the recent electricity tariff hike in Chhattisgarh, and small steel mills in the area have also reduced production. Consequently, decreased manganese alloy production is matched by lower demand from steel mills.

Producers with their own power plants remain unaffected by the tariff hike, making a sharp price increase difficult. Additionally, the arrival of high-priced imported ore and MOIL's August price announcement will further influence price movements.