India: Silico manganese prices under pressure on signs of easing supply concerns

Indian silico manganese prices decreased this week as a result of weak market sentiments, need-based buying, and the slump in export demand. Also, some bulk deals on lower prices had an adverse impact on silico manganese prices.

As per SteelMint's assessment, silico manganese offers in Raipur are at around INR 66,600/tonne (t) exw, dropping 2% w-o-w. Prices in Vizag touched INR 68,300 t exw, down 1% w-o-w, while in Durgapur prices were at INR 65,500/t, down 2% w-o-w.

Producers' quotes for grade 60-14 remained at around INR 67,000-68,500/t exw in Durgapur, Raipur, and Vizag. However, traders offered at INR 65,000-66,500/t exw in all the three locations due to weak demand. SteelMint recorded trade volumes of around 5,500 t of manganese alloys in the domestic market this week.

Factors affecting prices

• Holidays in EU keep export bookings limited: Buyers were looking for lower prices in the export market, primarily from South East Asia and the Middle Eas, at roughly $ 770-$780/t FOB for silico manganese grade 60-14, while sellers were unwilling to sell at this level because their margins have contracted.
  Furthermore, the European region is the largest buyer of Indian material, and due to summer vacation and energy inflation, exporters received few inquiries.
  
  
• Easing supply concerns from Vizag: Low acceptance of offer prices in the domestic market persists due to oversupply, and purchasers are choosing to wait and watch amid uncertain market trends. Although domestic sellers are trying to lift their prices given high input costs, it will be hard to increase prices amid overall low steel demand.
  Also, many production facilities in Vizag had shut down from the first week of July due to increase in power tariffs, which directly impacts production costs. Some producers continue production despite load shedding in order to cover expenses. According to unconfirmed reports from sources, the industries association is negotiating with the state government for tariff rebate, but no decision has been taken till now.
  
  
• Billet prices drop: The Indian steel market remains slow due to lack of demand and fluctuating raw material prices. SteelMint's domestic steel billet index was at INR 41,000/t exw-Raipur on 18 July, down INR150/t w-o-w. Overall, demand in this ongoing monsoon season has thinned and mills are saddled with inventory, which has kept long steel prices under pressure.
  
  

Outlook
Silico manganese prices may fall slightly in the near term, as domestic demand for manganese alloys remains low, while export demand also remains subdued.