Indian ferro silicon prices fell as a result of the non-acceptance of higher prices by buyers which led to a crash in demand. The lower prices are causing buyers to renegotiate their offers as they are unwilling to book material at higher rates.
According to SteelMint assessment on 8 April, ferro silicon prices hovered around INR 178,000-180,000/t exw from both Guwahati and Bhutan. The month started with around 1,500 t of deals in the domestic market.
Highlights
Domestic steel mills are resisting from booking material on high prices. Most consumers are speculating that prices may move down further on slow buying interest, thereby intensifying selling pressure. Meanwhile, some producers who are booked for the month are still offering higher than the price levels mentioned above.
However, bulk buyers are booking material at higher prices on a monthly inventory basis as hampering the production cycle is not feasible for steel manufacturers.
Bhutanese prices have been steady at INR 180,000/t exw for the last couple of weeks despite limited buying but producers have had little success in finding market acceptance. The result has been rising inventories at plants. Ample inventory and low business activity are prompting ferro silicon sellers to reduce their offers from Bhutan.
China’s market overview
A gradual strengthening has been observed in the ferro silicon market this week. In response to rumors that Shaanxi Fugulan carbon has halted production for rectification, ferro silicon futures are now rising. Inventories with ferrosilicon manufacturers are not high and export demand is strong.
Despite strong expectation of production resumption and replenishment, the fundamentals of the steel industry are strong. There is, however, high market resistance to high-priced resources and there are few actual transactions on the market. The market needs to remain alert to risk factors due to the obvious rise in delivery inventory and the gradual accumulation of ferro silicon risks.
Outlook
Despite weak domestic demand and firm raw material prices, ferro silicon prices in India are expected to remain stable in the coming week.
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