India: Silicomanganese prices come under pressure on lack of demand
Indian silicomanganese prices corrected amidst muted demand from mild Steel industries on rising Covid cases in the country. Most producers are finding it difficult to maintain offer levels, while few have lowered the prices to liquidate their stock.
Silicomanganese 60/14 is assessed at INR 88,000/t Ex-Raipur and INR 88,000-89,000/t Ex-Durgapur. Meanwhile, export prices remained stable with most exporters offering June shipments. However, in Raipur, few producers are still quoting INR 90,000/t but no deals were concluded at these levels this week.
Demand from steel industry fades
Due to the lockdown imposed in several parts of the country many steel plants will be shut, resulting in lesser demand from the steel industries. In addition to this, silicomanganese producers anticipate that due to limited oxygen availability in the market, steel production might be curbed further, resulting in lower silicomanganese demand.
Raipur producers facing lockdown challenges
There is a direct impact of lockdown on the Raipur based manganese alloys smelters as they are facing huge labour issues. Most of the producers reported to steelMint that while production is going on at its regular pace breaking and sizing is an issue due to labour shortage. Most of the semi-skilled and low skilled labourers are facing resistance from their village men who are voicing their apprehension and advising them not to go to the industries for work during a covid resurgence. Thus, there is an issue of dispatches which is expected to deepen further. However, SteelMint learned that Durgapur based industries have no labour issues as of now.
Silicomanganese producers are operating at healthy profit margins
A healthy profit margin has provided the silicomanganese producers an opportunity to reduce the prices without being too concerned. The cost of production is still hovering at around INR 62,000-65,000/t in India, while the prices of the alloy has escalated to record highs. Therefore, producers are also trying to book as much quantity as possible at these high levels with a slight price correction.
There is increased uncertainty over the lockdown situation countrywide. With the increasing number of Covid cases all over India and partial lockdown in many states, smelters remain anxious about the future pricing trends amid curtailed demand from the steel industry.