Indian silico manganese prices rally on strong export demand
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The Indian silico manganese market witnessed an exceptional spike in export offers for the 65-16 grade. The export prices increased by a hefty $60/tonne week-on-week (w-o-w) to $1,460/t FoB for the 65-16 grade and by $50/t to $1,350/t FoB India for the 60-14 grade. Following a rise in export prices, domestic prices of silico manganese also shot up to INR 97,250/t, up by INR 6,250/t w-o-w ex-Raipur and INR 96,000/t, up by INR 5,500/t ex-Durgapur.
Key Features
European demand driving up the market
Indian silico manganese producers told SteelMint that there is an excellent demand from the European countries for higher-grade alloys. Europe is facing severe shortage of the material and hence are booking material at higher prices for the next quarter. Most of the exporters remain booked for Aug'21 shipments, which is making merchant exporters look for material in non-port-based regions like Raipur, further boosting bullish sentiments. Some deals were concluded at around $1,430-1,450/t exw, while the FoB prices were at around $1,470/t from Indian ports. Some Raipur-based producers sold 60-14 grade to European countries at around $1,330-1,340/t exw through merchant exporters.
India major exporter for Asian, European markets
India and Malaysia are the two biggest exporters of silico manganese for the Asian market. With shutdown of major Malaysian manganese alloys smelters due to increased Covid cases, demand has turned towards the Indian and Chinese markets. Although, domestic prices in China are at around $1,170/t exw-China, lower as compared to the Indian prices for the 65-16 grade , the export taxes put prices on par with Indian prices. The production cuts in China are also boosting the sentiments.
Higher prices find acceptance in domestic market
After the Indian government provided relaxation on oxygen supply following a downtrend in Covid cases , many smaller induction furnaces restarted operations which resulted in increased demand. However, most of the producers are booked for the month, and hence stay firm with their prices. On the other hand, supply shortage is driving silico manganese prices. The domestic buyers are wary of a further increase in prices and, therefore, booking at higher prices. Most of the deals in Raipur were concluded at around INR 97,000-97,500/t, while a small deal was concluded at INR 98,000/t. Most of the sellers in Raipur are quoting around INR 98,000/t. However, in Durgapur, prices are yet to pick up pace, as most deals were concluded at around INR 96,000/t. Many producers are also holding offers as they have limited stocks and believe that prices may increase further.
Imported manganese ore prices up
With increasing manganese alloys demand and prices, the prices of manganese ore also increased by around 12% w-o-w for the higher grades. However, producers reported very little impact on manganese alloys prices, as the hike is purely demand-driven. Major smelters held manganese ore inventory for the next two months, and are selling at enough margins to import higher-priced ores.
Outlook
While the sentiments look bullish and the producers believe that the prices may soon touch the INR 100,000/t-mark, the smelters remain wary of Chinese exports. Producers are also concerned that once production from Malaysia resumes, and China starts exporting the material, there may be a correction in prices. However, since most of the producers are sitting with huge orders in hand, they may stay firm with their prices.
