Indian silico manganese prices edge up w-o-w on global price support

• Prices rise on global demand, strategic supply curtailment
  
  
• Market participants expect further price hike
  
  

Indian domestic silico manganese prices edged up by INR 400/t ($5/t) w-o-w amid rising demand from overseas countries along with limited supply. Also, some domestic smelters have put furnaces that have curtailed output strategically to maintain the profit margin and to avoid oversupply in the market. As earlier manufacturers were creating thin margins by running their furnaces with maximum capacity. These rising global trade in silico manganese and strategic steps by smelters kept prices rising.

According to BigMint's assessments, the price of silico manganese in Raipur touched INR 68,300/t exw ($823/t), up INR 600/t ($8/t) w-o-w. Durgapur saw weekly price inched up by INR 300/t ($4/t) exw, to INR 68,300/t exw ($823). Vizag's prices rose by INR 400/t ($5/t), to INR 68,400/t ($823/t).

"There is a shortage of silico manganese in the spot market as many of the smelters have booked furnaces till March and the sellers are left with a limited volume of material to serve in the retail market. Also, traders have a limited volume left over with them to offer in the spot market, and it might create a panic buying situation in the domestic market," said a Raipur-based smelter.

Factors influencing silico manganese prices:

Pending deliveries of older bookings: Major producers in key regions like Durgapur, Raipur, and Vizag, typically responsible for high-volume production of manganese alloys, currently face significant booking commitments that have occupied their furnaces until March. This has resulted in limited supply in the retail market, with some producers even exiting the market altogether. This restricted supply has triggered weekly price increases, despite buyer reluctance to purchase at higher prices.

Additionally, several large factories with a capacity of 14 furnaces have modified their output to accommodate the demand-supply gap; as a result, they are currently using 8-10 furnaces. Although this somewhat lessens the situation, the limited supply eventually helps to support the price.

Anticipated price increase drives active booking of silico manganese: Market anticipation of a price hike for silico manganese (grade 60-14) by INR 1,000-2,000/t, reaching at the level of INR 70,000/t from the current offering, has triggered active booking activity by both domestic and overseas buyers.

Smelters anticipate rising prices for imported material due to the situation in major manganese ore-producing countries like South Africa's ore production costs have increased due to electricity issues and escalating ocean freight costs. Also, overseas buyers were actively booking material in anticipation of price increases.

Outlook

Silico Manganese prices are projected to rise in the short term. According to BigMint's market analysis, rising manganese ore prices, which are a critical raw material, are exerting upward pressure on silico manganese production costs, and Indian exporters expect increased demand from international markets.

However, BigMint emphasises careful tracking of domestic manganese alloys production volume and downstream market performance.