Indian ferro silicon prices continued to touch historic highs w-o-w due to hike in imported prices. The latter are up in line with the global supply shortage brought on by production cuts on surging global power tariffs. Prices have been picking up on a daily basis since last week amidst bullish sentiments in the Chinese market.
According to SteelMint’s assessment, Guwahati producers were offering at INR 257,850/tonne (t) exw, up 18% w-o-w as against INR 218,000/t exw on 30 Sept’21. However, trade prices from Guwahati were recorded at around INR 255,000-275,000/t exw on 7 Oct’21.
Meanwhile, Bhutanese smelters were offering at INR 228,750/t exw, 12% higher than the offers on 30 Sept’21.
Earlier, Guwahati producers used to follow Bhutan’s ferro silicon prices. But now, their offers are being guided by factors like availability of stocks, demand, and international prices of the material.
This is the first time that Guwahati’s ferro silicon prices have surged by 134% against January’s monthly average prices of INR 110,250/t exw. On the other hand, Bhutanese prices spiked by 112% from January’s monthly average of INR 108,000/t exw. This is mainly because of the price rise in China amidst persistent production cuts due to power curbs.
In addition, Indian ferro silicon producers are the main game changers in the consistently rising domestic ferro silicon prices arena. Higher costs of containers due to shortage and all-time high prices in China have reduced the scope of importing the material into India. So, Indian buyers have no other option but to book the material from the domestic market which is giving scope to the Indian smelters to sell the material at their desired rates.
Buyers are perplexed about the escalating prices of ferro silicon and are reluctant to book in large volumes. As a result, they are booking only the amount required to keep their mills operational so that production will not get hampered.
One of the major producers also explained, “Current market prices of ferro silicon are artificial hiked. Sooner or later, these will crash once prices firm up in the Chinese market. However, there is a strong chance that prices may touch a record level of up to INR 300,000/t very soon as there is good demand in the spot market.”
Outlook
Ferro silicon producers are optimistic of bullish market in the coming days due to good demand from the domestic and export markets. Moreover, a hike in prices of coke and high costs of electricity in the future may support ferro silicon prices further.
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