Indian ferro silicon prices fall on limited demand

Indian ferro silicon prices, which were continuously increasing for a couple of months, have come to stabilise at a certain level from the first week of Aug’21 owing to muted demand from consumers. SteelMint’s assessed current market prices for HC70% grade are at around INR 127,000-127,500/t exw for both Guwahati and Bhutan. Ferro silicon producers are offering higher prices too for different grades, sizes, payment terms, and packing.

LAMC production costs hit high

Prices of low ash metallurgical coke (LAMC), one of the basic raw materials for ferro silicon’s production, increased by around 35% on increasing raw material shortage. A major ferro silicon smelter reported that production costs have hit high, increasing by around INR 12,000-15,000/t due to the increasing costs of raw material. After the closure of many illegal coke plants in Guwahati, it is expected that the availability of coke may be scarce and prices may hit further highs.

Demand subdued on higher prices

Domestic steel mills are resisting book material due to the higher prices . Most of the consumers are speculating that prices may move down further on slow buying interest, further intensifying selling pressure  Meanwhile, some producers who are booked for the month are still offering higher than the above-stated levels.

However, bulk buyers are booking material at higher prices on a monthly inventory basis as hampering the production cycle is not feasible for the steel manufacturers.

Chinese prices at record-high

China’s ferro silicon prices are increasing owing to supply tightness due to production curtailment in various regions. Instability in hydro electricity and further delay in monsoons in intensifying the production cuts in the region. Meanwhile, increased export duties are also hampering the exports business in the country.

Outlook 

Indian ferro silicon prices are expected to remain relatively stable mainly due to increasing costs of raw materials and the unavailability of coke. However, tepid demand may deter sentiments of the market.