Indian ferro silicon supply to be disrupted as Bhutan announces nationwide lockdown with buyers scrambling to procure the alloy.
Bhutan is going under lockdown for a tentative 7 days from today in the wake of a detected a positive person who was also exposed to various people in the country. This lockdown period is supposed to help with the tracing of all positive cases and break the chain of transmission.
“The drastic yet extensive measures of lockdown now, complemented by strict public compliance, will help us achieve our target of combating the spread of the disease with
efficiency, in a shorter period of time. This will enable the government to make arrangements to ease out the restrictions as soon as possible,” the government official said in a statement.
Indian consumers of ferro silicon are likely to face some supply shortage. This lockdown will also further accentuate the supply situation in the market.
In 2019 India imported around 0.16 mnt ferro silicon from Bhutan for its domestic consumption, which is also about 46% of the total yearly consumption of India.
Bhutan is the biggest supplier of ferro silicon for India, having capacity of around 15,000t per month.
Meanwhile, due to the supply scarcity in Bhutan and North-eastern state of India, the prices are now escalating drastically. Producers of Assam and Meghalaya have raised their prices to take advantage of the supply-demand mismatch.
Although market expectation is that the heightened prices are short-lived, given the downbeat records for various previous lockdowns, they are hoping to take advantage this time around.
Producers in North-eastern markets are quoting from INR 78,000-90,000/t depending on the available material with them. One of the major producers from Meghalaya commented, “Since yesterday, we are getting a higher number of inquiries, and the supply in the domestic market is short. We are currently quoting INR 78,000/t and expect it go higher.”
Another producer said that there is a severe shortage of material, and most of the producers are out of stock in North-east, and only Bhutan has ample amount of stock which will be out of the market for a short duration. They are quoting around INR 90,000/t. Meanwhile, a major producer of Bhutan has commented that this increase will be short-lived and the prices will come down as soon as the lockdown eases.
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