Indian ferro silicon prices witnessed a drop this week owing to low demand in the domestic market. Currently, ferro silicon is being traded at around INR 126,000/tonne (t) exw-Guwahati, while prices in Bhutan remained stable w-o-w at INR 124,000/t exw, according to SteelMint’s assessment.
Buyers turn to Bhutan market on domestic supply shortage
Bhutanese ferro silicon sellers are receiving many inquiries from Indian buyers as the stock with Guwahati-based smelters has exhausted and apparently, the sellers have a limited quantity to offer in the spot market. Thus, buyers have no option but to divert to the Bhutanese market. Bhutan’s ferro silicon plants are currently running without any hindrance after getting relief from lockdowns and labour issues.
Indian buyers show less interest on rising Chinese prices
Chinese ferro silicon prices moved up owing to tight supply in the market. Inner Mongolia’s ferro silicon output remained hit on power supply norms issued by the Chinese government. Meanwhile, Ningxia province smelters will also have to cut the production after meeting the energy consumption dual control targets. This has caused a supply-demand mismatch in the market.
Moreover, increased prices of purchase tender issued by major steel mills also supported smelters to hike ferro silicon prices. China’s ferro silicon prices are getting support from rising Chinese ferro silicon futures, sources said. However, Indian producers are least interested in the Chinese market. On the contrary, producers and traders in India are optimistic on the outlook and expecting prices correcting soon.
Europe’s ferro silicon prices on historical high
Ferro silicon prices in Europe have reached a historical high. According to sources, ferro silicon (HC 75%) prices are hovering at around $2,426-2,600 /t on prorate bases in Europe due to supply issues. Due to an acute shortage of high-cost containers, European buyers are refraining to import ferro silicon from Brazil, Ukraine, or Malaysia. Meanwhile, producers are booked till Nov’21 or more likely till Dec’21 catering to domestic European steel mills. Strong demand with tight supply is fueling a hike in ferro silicon prices in the European countries. Indian consumers and traders are speculating that these prices might inflate further in the coming days, so they are trying to make the best out of it before the hike.
Outlook
Guwahati producers will complete their orders in the coming few weeks and will start offering in the spot market. Due to increased prices and tight global supply, Indian producers are expected to raise their offers to maintain price parity.
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