India: Silico manganese prices edge down as domestic demand wanes
Domestic demand for silico manganese has been dull since the past couple of weeks. Many steel mills have reduced their production levels amidst higher prices of raw mater...
Domestic demand for silico manganese has been dull since the past couple of weeks. Many steel mills have reduced their production levels amidst higher prices of raw materials and declining margins. This has had a cascading effect on the rising prices of silico manganese.
Prices have started coming down over the past two weeks, and are currently ruling at around INR 98,000/t ex-Raipur and INR 97,000/t ex-Durgapur. However, there is great variation in prices across regions, depending on availability.
Meanwhile, higher profit margins so far are also enabling sellers to lower their prices to attain higher volumes.
Some deals in Vizag and Durgapur were also concluded at around INR 95,500/t. However, most sellers are reluctant on reducing prices further. Producers believe that prices may soon pick up after steel production improves. Bearish sentiment is sustaining and increasing domestic manganese ore prices may not support silico manganese prices either.
The export market also remained sluggish as European demand is drying up and the importers are reluctant on taking positions for Nov'21 shipments.
Currently, offers are around $1,380-1,390/t FoB India for the 60-14 and $1,500/t FoB India for the 65-16 grade. Some producers are also offering at even lower prices compared to the stated levels.
Most producers are booked and offering very limited quantity in the spot market. A few producers and many traders who are solely dependent on the spot market are reducing prices, expecting these to fall further.
It is widely expected that steel prices may drop further in the month.
Most Indian buyers, at present, are expecting a further fall in prices and therefore resisting buying higher volumes, further putting pressure on the silico manganese smelters.
Some major miners increased manganese ore prices for Aug'21 shipments amidst soaring freight rates. However, higher port inventory in China and production cuts in northern provinces, are yet to impact the Chinese spot market.
Prices of silico manganese are expected to fall further amidst low demand in the domestic market. Meanwhile, in the exports market, prices are expected to remain stable due to the appreciating Indian currency against the US dollar.