Bhutan: Ferro silicon prices drop in line with declining import prices

Ferro silicon prices in Bhutan fell significantly w-o-w by INR 9,000/t exw in order to maintain price parity with Chinese ferro silicon prices.

According to SteelMint’s assessment on 15 Apr’22, Bhutanese producers’ offers were at around INR 170,000/t exw and producers in Guwahati followed suit by keeping offers at around INR 170,500/t exw, a decrease of INR 7,500/t w-o-w.

Highlights

• Some major Bhutanese producers announced new offers at INR 165,000/t exw to boost domestic buying. As import offers were competitively lower than domestic offers, most buyers relied on imported material. As a result, manufacturers lowered their offers.
• Some producers are still at a higher price point of around INR 180,000/t exw Bhutan as they have enough orders in hand and are not in a hurry to take orders under pressure.
• Buyers are hesitant to book material at higher prices because of which producers have reduced prices.
• High inventory and weak demand led to a decline in steel prices. Steel buyers also stayed away from higher booking levels. This has led to oversupply in the market and a downward correction in ferro silicon prices.

China’s market review

This week the ferro silicon in China market edged up. The rectification policy of Shaanxi orchid charcoal was lower than expected during the middle of the week, leading to an increase in the overall negative sentiments in the market.

Due to the shutdown of some enterprises, the market was concerned about tight supply. Moreover, in response to this environmental protection policy, ferro silicon futures prices rose on Friday and the spot market followed suit this week.

Additionally, ferro silicon spot market transactions were average. Steel mills concluded their bidding one by one, and traders primarily bought on the basis of actual demand. Ferro silicon prices are expected to remain mostly stable in the near future.

Outlook
Market participants are expecting that ferro silicon prices might come under pressure in the near term amid weak demand and the likelihood of steel prices softening.