EU Silico-Manganese Prices Unlikely to Rally Despite Filled Quotas

Silico-Manganese

EU silico-manganese prices are unlikely to rise sharply despite the rapid exhaustion of tariff-free import quotas for Indian material and supply from other developing countries. Weak end-user demand, existing stock coverage and summer maintenance at steel mills are limiting the price impact.

EU silico-manganese prices did move higher after the third safeguard quota period opened on 18 May. Importers tried to pass duty costs through to consumers, lifting prices by €30/t on 21 May.

EU silico-manganese prices still face resistance from buyers. Many large steel consumers already secured annual contracts or imported material before the safeguards took effect, leaving limited spot demand in the market.

The result is a tighter import structure without a strong demand shock. Quota exhaustion is raising costs for importers, but it has not yet created the kind of physical shortage needed to force a major price rally.

Filled TRQs Raise Import Costs but Demand Remains Covered

Importers submitted 41,993t of Indian silico-manganese for clearance on the first day of the new quota period. That exceeded the available Indian quota of 31,959t by 10,034t.

Only 76% of the submitted Indian material was allocated inside the quota. The rest had to clear as out-of-quota material, exposing importers to higher costs under the EU safeguard mechanism.

The safeguard system combines country-specific tariff-rate quotas with a variable duty on excess imports. The duty is calculated against a price threshold, effectively creating a minimum import price.

For silico-manganese, that minimum import price is €1,392/t. This is well above the recent European delivered market assessment of €1,080-1,130/t.

That gap creates immediate pressure on traders holding out-of-quota material. One trader said the duty impact on part of his cargo would raise his average import cost by about €120/t across the full shipment.

Some suppliers have increased offers by around €50/t and are holding material while they assess market direction. But buyers are not accepting higher prices quickly because cheaper unsold units remain available in smaller volumes.

The timing also weakens the price case. European mills typically reduce activity during the summer maintenance period, lowering near-term consumption of manganese alloys.

Safeguards Shift Trade Flows While CBAM Alters Alloy Choices

The EU introduced safeguards on silico-manganese, ferro-manganese, ferro-silicon and silico-magnesium in November to protect European alloy producers from lower-cost third-country imports.

Silico-manganese has attracted more import activity than some other alloys. The quota for “other countries” was exhausted in both the second and third periods, while the current 18,956t quota was filled by 21 May.

Norway’s quota has also been closely watched. Its second-period quota was exhausted in April, but the third-period quota still had a large remaining balance as of 22 May.

Zambian material also remains available within quota. This gives importers some alternative supply routes, even as India and other-country quotas fill quickly.

Ferro-silicon and ferro-manganese quotas have not been filled. This shows that the safeguard impact is uneven across the ferro-alloy market.

CBAM is also changing trading behaviour. Silico-manganese is not subject to the Carbon Border Adjustment Mechanism, while high-carbon ferro-manganese carries additional administrative and compliance burdens.

That has made some traders more comfortable importing silico-manganese than ferro-manganese. Even when prices are close, lower bureaucracy can make silico-manganese more attractive from a trading perspective.

Ferro-manganese prices are receiving some support from CBAM-related caution, but liquidity and demand appear stronger in silico-manganese. This could keep trade flows focused on silico-manganese until buyers’ inventories fall.

The main market impact may therefore arrive in autumn. By then, end-user stocks could be lower, summer maintenance will have passed and importers may face tighter replacement costs under the safeguard regime.

The Metalnomist Commentary

The EU safeguard system is already raising import costs, but weak steel demand is preventing a sharp silico-manganese rally. The real test will come after summer, when mills return and buyers need to replace stocks under a more expensive import structure.