Indian ferro silicon prices registered a fresh record high on Thursday, in line with higher international prices and tight supply.
As per SteelMint’s assessment on 21 Oct’21, Guwahati-based ferro silicon smelters increased their offers by 10% w-o-w to INR 285,350/t exw while Bhutanese producers are offering at INR 285,000/t exw. Small steel mills are furious and booked small quantities. However, only major steelmakers have booked large quantities this week.
Meanwhile, in line with expensive sea freight along with container shortage and soaring global ferro silicon prices, Indian buyers are now solely dependent on domestic materials — which is intensifying the supply shortage and lifting ferro silicon prices in the local market.
In addition, ferro silicon imports would not be viable for Indian consumers as the prices of ferro silicon CNF India from China are comparatively higher than the domestic offers. Chinese producers are offering at $3,800/t, FOB China for HC 75% ferro silicon.
Moreover, Indian producers are receiving robust inquiries from the international market, mainly from European countries owing to severe production cuts due to higher power costs and supply shortfall. This is encouraging Indian smelters further to escalate their prices to a new high.
Russia reduces export taxes
Russia’s Ministry of Economic Development reduced the export tax on ferro silicon from 15% to 5% (but on not less than $150/tonne) effective from 15 Oct’21. The Russian government decided to decrease the export tax so that Russian producers could hold the profit margins and secure the long-term terms contract with seaborne buyers.
However, the reduction in the export tax would not impact India’s ferro silicon market as Russia focuses mostly on the US market, sources informed.
Outlook
It is expected that producers may raise their offers further in line with rising coke prices and supply constraints.
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