Indian ferro silicon prices dropped moderately this week despite good inquiries from the domestic market. The buyers are reluctant to book the material at all-time high prices and are aggressively negotiating with smelters. This has compelled the producers to reduce their offers.
SteelMint assessed on Thursday, the current market price for ferro silicon HC 70% grade at INR 265,500/t exw-Guwahati (a major ferro silicon production hub in India) – a significant drop by INR 19,850/t w-o-w from last Thursday.
This week kickstarted with some decent deals after the fall in ferro silicon prices.
Why have prices gone down?
Major tender concludes at lower price: India’s major steel producers closed ferro silicon purchase tenders at lower prices. One of the largest steelmakers recently closed a ferro silicon tender for 1,500 tonnes (t) at INR 270,500/t delivered at the plant, sources informed. This price is comparatively much less to last week’s offer. As a result, this led ferro silicon smelters to decrease their offers in spot markets too.
Parity with international prices: Indian buyers import ferro silicon mostly from Bhutan and China, the latter being the largest ferro silicon producing country. So generally, the Indian market maintains the price parity with Bhutan’s offers followed by China.
According to SteelMint’s assessment on 28 Oct’21 Bhutanese producers reduced their offers by INR 14,900/t to INR 270,100/t exw for HC-70% grade to match their prices with the Chinese offers.
Meanwhile, China’s ferro silicon prices softened to $3,220/t FOB China for HC 72% owing to a standardised price formation mechanism for coal and coke, established by the National Development and Reform Commission of China. Coal and coke are some of the basic raw materials for ferro silicon production. This encouraged Indian buyers to procure material at lower prices.
Outlook
Indian ferro silicon prices are expected to decline in coming weeks due to low buying at higher rates.
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