India's Silico Manganese Prices Hit Record Low On Demand-Supply Mismatch

Silico Manganese (SiMn) prices in India have reached a new low, with levels not seen in over two years. The first quarter of CY21 marked the previous low point for SiMn prices. The current price pressure can be attributed to a mismatch between supply and demand. Ofbusiness assessed that weakened export demand exceeded supply in the domestic market, exacerbating the situation.

Reasons Behind Falling Rates

• Supply- Despite low demand in both the domestic and export markets, Indian Silicon manganese producers continue to operate their plants at near full capacity. This oversupply has led to a price decline, even though Steel commodities have experienced a recent recovery, with prices rising by around Rs 500-1,000/ton through the mid-sized Steel mills.

• Ore And Alloys- Furthermore, the imported Manganese Ore price downturn and the low demand for manganese alloys have also contributed to the decline in SiMn prices.

Domestic Market Price Trends

Silico Manganese prices have witnessed a decline this week, dropping by Rs 1,000-2,000/ton: Current Silico Manganese (HC 60-14) prices are: 

• Raipur- Price is approximately Rs 71,000-71,500/ton, compared to the previous week’s price of Rs 72,000-72,500/ton ex-works.

• Durgapur– Prices have fallen by Rs 1,500-2,00/ton to approximately Rs 70,500-71,000/ton ex-works.

With improved availability, traders have become more active in the market, increasing price competitiveness. They are offering prices lower by Rs 500/ton compared to offers through the plants.

Export Demand And Offers

Silico Manganese export demand remains weak, with no major activity reported recently.  Silico Manganese (HC70, 65-16) current offers are hovering around $950-960/ton FOB, down by $60/ton month-on-month. Despite the sharp fall, buyers are not in a purchasing mode, resulting in a stagnant market.

Will The Downtrend Continue?

Industry participants believe that Silicon Manganese prices are likely to remain under pressure. The latest Steel price rise is seen as temporary, and the weak exports for Silicon Manganese indicate a bearish trend in the international markets. The Indian SiMn industry will closely monitor market trends and make adjustments accordingly. It is crucial for producers to balance supply-demand to stabilize prices and ensure a sustainable future for the industry.

OFB’s Insight

The Silico Manganese market in India is facing challenging times, with a demand-supply mismatch leading to record-low prices. The weakening export demand, along with improved supply, has put downward pressure on prices. Imported Manganese Ore price downtrend and the low manganese alloys demand have further contributed to the decline. While Steel prices have shown some signs of recovery, industry participants expect Silico Manganese prices to remain under pressure, especially with the bearish market trends in China and the sluggish export market.

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