India's silico manganese export prices slump on weak demand, container shortage

• Logistics issues hit India's silico manganese exports demand
  
  
• Rising ocean freight delaying bookings from India
  
  

Indian silico manganese exports offers dropped by $47/t w-o-w. Limited trade and container shortages in global market have impacted export prices in recent weeks.

BigMint's assessments on 24 June, 2024, showed a mixed trend, with the 65-16 grade (SiMn 65-16) touching $1,172/tonne (t) FOB, down by $48/t FOB while the 60-14 variety declined by a steeper $46/t FOB to $1,026/t FOB. Major producers in Vizag and Raipur were forced to maintain their silico manganese 65-16 grade almost flat at an FOB range of $1,170-$1,180/t, due to limited demand for the material.

Factors impacting silico manganese prices

Rising ocean freight delays bulk inquiries: The ongoing disruptions in the sea, forcing re-routings of Indian exports, have resulted in a significant rise in shipping freight costs. The ocean freight to EU, which was $1,400-1,450 per container last week, has increased by $35-50 per container this week.

Re-routings have driven up shipping costs, impacting profitability for exporters and increasing import costs for buyers. The financial burden of higher freight created hesitation on both sides of the transaction, leading to delays in finalising export agreements.

Disruptions in global logistics squeeze silico manganese exports prices: Indian silico manganese exporters face a double whammy: Red Sea re-routings and a container shortage. Reliance on the Suez Canal for trade with key regions is disrupted, while container scarcity delayed shipments by months. Carriers struggle to reposition empties due to trade route issues, leading to port inventory buildup and pressure on domestic prices.

Bid-offer disparity from destination markets - Bid-offer disparity from Japan and Taiwan have limited Indian silico manganese export bookings from India. Offers and price indications from India are around $10-20. Inquiries from EU have been limited this week. All these factors have kept Indian silico manganese export market subdued as key traditional markets have not shown much interest at current levels.

Outlook

Sea route disruptions and container shortages dimmed the outlook for Indian silico manganese exports. Limited demand is expected to push export prices down until the market recovers. Close monitoring of trade routes, container availability, and export activity is essential for navigating this logistical headwind.

A key exporter informed BigMint that concerns are there about South Asia's dwindling container supply. This shortage could disrupt regional supply chains, leading to delays, higher freight costs, and economic repercussions. The exporter emphasises the need for shipping stakeholders to adopt strategic and adaptable solutions to mitigate these challenges.