India: Weak manganese alloys demand weighs on silico manganese prices

Silico manganese prices in India dropped marginally as domestic as well as export demand for manganese alloys has softened.

Additionally, the continuous declines in manganese ore prices have compelled buyers to book material at lower prices. Currently, the silico manganese market is being driven by low downstream demand and prices are struggling to get support.

As per SteelMint assessment on 1 August, Raipur-based producers offered silico manganese at INR 75,900/t exw, a decrease of INR 2,000 /t w-o-w, while prices in Durgapur dropped by INR 3,700/t to INR 75,200/t exw.

Responding to overseas enquiries, exporters offered 60-14 grade material at $960/t, down $20/t. Prices of 65-16 grade fell by $55/t to $1,070 /t FOB India. SteelMint recorded trade volumes of around 3,500 t this week.

Factors keeping silico manganese prices under pressure-

• Lower manganese ore prices: Manganese ore prices are down due to production cuts of manganese alloys by 30-35% owing to low demand. Meanwhile, India's largest manganese ore miner MOIL has decreased prices of all grades by 10% on the existing prices. This led to the decrease in prices of silico manganese.
  
  
• Coking coal prices down by $35 w-o-w: Coking coal prices decreased by $35/t owing to subdued steel demand. This has also put pressure on silico manganese prices.
  
  
• Bearish global silico manganese market: Bearish sentiments pesisted in the global silico manganese market which dampened liquidity, thus, affecting domestic market prices.
  
  
• Lack of export enquiries: Indian exporters have been witnessing lack of inquiries due to multiple reasons: (i) Energy crisis in Europe, leading to steel production cuts (ii) Cheaper offers from China to South East Asia creating pressure on other seaborne selling market. Although China has already cut production by 60% owing to weaker demand. (iii) Subdued buying from MENA due to festive season.
  
  
• Rise in Indian domestic steel prices: Steel prices moved up slightly supported by need-based inquiries made in the domestic market. However, bulk inquires were still absent. Furthermore, steel production decreased which pushed down silico manganese prices. On the other hand, there was tight supply for steelmaking raw materials (sponge iron and scrap) in the domestic market.
  
  

China market overview

Silico manganese (60-14) prices in China were stable at RMB 67,00/t ($ 990/t) exw-Inner Mongolia, while 65-17 grade prices were down by RMB 200/t to RMB 7,300/t ($1,079/t) exw-Inner Mongolia. China's silico manganese market was steady last week and trade was tepid. The current scenario is such that there is pressure on manganese alloys sellers.

Meanwhile, silico manganese futures on the Zhengzhou Commodity Exchange (ZCE) for September delivery inched up w-o-w to settle at RMB 7,375/t on 2 August.

Outlook
It is expected that the domestic market may continue to remain weak for the short term with nominal fluctuations in silico manganese prices. However, the steel market trends and production volumes may impact the manganese alloys price trends.