Indian silico manganese export prices in free fall. Know why?
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- Delayed empty container allocation causing a fall in export demand
- Subdued global trade weighs on export price
Indian silico manganese exports grappled with weak demand and container shortages, leading to declining export offers fell by $37/t w-o-w.
BigMint's 8 July 2024 assessments revealed a significant decline in Indian silico manganese prices compared to the previous week, while this trend has been seen from past two months. The 65-16 grade (SiMn 65-16) witnessed a drop of around $ 57/t FOB to $ 1,058/t FOB, while the 60-14 grade fell by around $ 17/t FOB to $ 938/t FOB (Haldia/Vizag).
India's silicon manganese exports fell from 0.53 mnt in January-May, 2023 to 0.48 mnt in January-May, 2024, as per data compiled by BigMint. Considering lower export bookings in the past couple of months, these volumes are expected to drop further in the near term. This decline in exports coincides with the recent downtrend in silico manganese export prices observed by BigMint.
Confirmed deal
Factors impacting prices
Delayed empty container allocation: Indian exporters of silico manganese, particularly high-grade varieties, are grappling with a logistical bottleneck caused by delays in empty container allocation. This one-month delay stems from the global container crunch further exacerbated by rerouting of shipments due to Red Sea canal issues. The delay in securing containers was causing complications in finalising export deals, especially for high-grade silico manganese.
Exporters face uncertainty in meeting delivery deadlines, potentially leading to contractual disputes and reputational risks.
Range-bound moment in imported ore prices: Silico manganese export prices also impacted w-o-w due to the mixed trend in manganese ore prices, the raw material for silico manganese. The decline in lower-grade ore prices w-o-w contributed to the drop in silico manganese prices, as lower-grade ores are used in larger quantities. The increase in higher-grade ore prices had a minimal impact since these ores are used in smaller quantities. Eramet Comilog has raised its August shipment prices for manganese ore to China. Gabonese lump ore with 44.5% manganese content now costs $9/dmtu CIF China, up by $0.7/dmtu.
These contrasting trends in ore prices highlight the complex dynamics influencing silico manganese export pricing.
Chinese silico manganese market experiences stalemate: Chinese silico manganese prices (65% Mn, 17% Si) held steady this week at RMB 7,440-7,630/t ($1,024-$1,050/t) despite mixed signals. Weak downstream demand is countered by high raw material costs and production resumption in some regions.
Outlook
The near-term outlook for silico manganese prices is uncertain, but might tilt slightly downward due to a confluence of weakening demand and persistent container shortages. Stakeholders across the supply chain are advised to closely monitor several key factors to make informed decisions.
One of the major exporters from India informed BigMint, a temporary production suspension in Zambia due to electricity scarcity could create an export opportunity for Indian silico manganese producers. However, container shortages remain a hurdle.
China's Hebei Iron and Steel (HBIS) Group floated a tender for procuring 14,100 t of silico manganese (65-17) for Jul'24. The price is down 3% m-o-m. Bids for Jul'24 delivery are at RMB 7,650/t ($1,052/t), down RMB 770/t ($106/t) m-o-m. The move suggests a potential softening in global prices, impacting India. Indian producers should monitor developments and adjust pricing strategies to remain competitive.
*correction in incoterm: January to April 2024 has been replaced by January to May,* 2024.
