India’s silico-manganese export price hits record high on surging demand

The Indian export price for silico-manganese jumped by nearly 9% on Friday March 19 to the highest since Fastmarkets started to assess the market in June 2014.

Fastmarkets assessed the silico-manganese, 65% Mn min, min 16% Si, fob India price at $1,250-1,280 per tonne on Friday, up by $100 per tonne, or 8.58%, week on week. The previous high of $1,220-1,260 per tonne was achieved in February 2018.

Export offer prices were reported as high as $1,300 per tonne, but that was seen as too ambitious by most exporters.

Indian producers have nothing to offer until May or more likely June, with demand reported from traditional customers in Southeast Asia, the Middle East, North Africa and Europe, sources said.

Indian export deals were reported at $1,250 per tonne for lots of a few hundred tonnes into Taiwan and Iran, with most buying inquiries from Europe into Italy.

“The market has shot up against a sudden surge in demand in the past week,” one Indian source said. “The container shortage and higher container prices, now at $80-90 per tonne [$2,400 per container] to Europe that are normally a third of that, has prompted more demand from Europe, Southeast Asia, Taiwan and the Middle East where Iran is a recent buyer from India.”

“Indian producers are selling silico-manganese for shipment in May and June and even for shipment between July and September due to worries that the container shortage may last for the next few months,” the source added.

Manganese alloys that are added to steel products make up at most only 2% of the cost of such steel, encouraging alloys suppliers that their offer prices can increase strongly in the near term. In turn, strong export appetite has cemented firm domestic demand from Indian steelmakers keen to secure manganese alloys deliveries before they are sold abroad. The Indian steel sector is also being boosted by a commitment from New Delhi to invest heavily in infrastructure are part of a multi-year plan to boost its economy.

All production of manganese alloys in India shut down on March 20 last year when the country’s nationwide Covid-19 pandemic lockdown began. There are more than 40 manganese alloys production plants in India and most smelters are running at around 85-90% of production, similar to pre-lockdown levels, sources said.

The construction and automotive production sectors represent the two main areas of consumption for silico-manganese and ferro-manganese, respectively. Silico-manganese is used to make long steel for the construction sector, such as rebar and wire mesh, and recent news on massive infrastructure spending from the Indian government appear to have encouraged the domestic steel industry.

India’s recent annual budget gave a boost to the country’s construction industry, with the government aiming to make the country a $5 trillion economy by the end of March 2025.

Indian domestic 60/40 silico-manganese grade is now trading at 84-85,000 rupees ($1,155-1,169) per tonne basis fob, up from 60,000 rupees at the start of the year. Fastmarkets’ manganese ore index, 37% Mn, cif Tianjin, the market relevant to manganese alloys producers in India, weakened to $4.86 per lb from $4.97 per lb last week, although Indian trade sources said firm fundamentals in manganese alloys should outweigh any downward price pressures that might usually apply when ore prices fall.

“There is limited spot availability of silico-manganese in India at present, with nothing much on offer until May at the earliest and probably June,” one Indian trader said.

“There is silico-manganese available below $1,250 per tonne for export, but that has higher carbon and phosphorous content,” another Indian trader said. There are some optimistic offers as high as $1,300 per tonne, but there have been no takers yet.”

Silico-manganese producers have limited sales outside of their bulk orders to customers for the next two months and into early June, according to some Indian producers: “That situation has increased domestic demand in India, and prices may reach $1,300 per tonne in the next couple of weeks, it depends on overseas demand which is firm at the moment,” one Indian manganese alloys producer said.

European sources said there has been some appetite for Indian silico-manganese from buyers in Northern Europe, but the bulk of buying inquiries and deals have come from Italy where steelmakers are keen to recover lost output amid the Covid-19 pandemic and want to source as much competitively price material as soon as possible.

The silico-manganese lumpy 65-75% Mn, basis 15-19% Si (scale pro rata), major European destinations price jumped up by around 20% during January to reach a range of €1,050-1,100 per tonne, and has leveled off since that time. Suppliers expect there may be more price movement in the next couple of weeks, however, with domestic steelmakers seen securing material for their second-quarter smelting schedules.

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