Indian ferro silicon prices are stable in Bhutan and Guwahati at INR 82,000/t. However, few deals have taken place at lower levels due to some suppliers having cash flow issues. Meanwhile, international prices are picking up but demand for Indian and Bhutanese ferro silicon from the international market remains absent.
Nine plants from India, have received the BIS certification so far, without which supply in India wouldn’t be possible. The deadline is for the certification is 23rd Oct’ 20. However, market participants believe that the deadline could be extended, as Indian steel manufacturers are mostly dependent on Bhutan for their ferro silicon requirement and Covid-led disruptions could result in some leniency from the Govt.
India is a net importer of ferro silicon as the domestic consumption is around 0.24mn t, out of which Indian production stands only at 0.10mn t, the rest of the demand is met through imports (mostly from Bhutan). In CY’20 (Jan-Aug), 45% of the ferro silicon imports were from Bhutan as per the Customs data. Therefore, if the deadline is not extended there will be a huge scarcity of material for the Indian steel producers
Outlook:
It is believed that next month’s purchases might start soon and till then the market is in a wait-and-watch mode. Market participants conveyed a pessimistic outlook with expectations of modest demand in line with the downtrending steel market. It seems unlikely that ferro silicon prices will rise before November.
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