Bhutan: Ferro silicon offers may rise as govt approves higher power tariff for energy-intensive industries

• Higher power tariffs may lift Bhutan’s prices by up to INR 2,000/t
• Bhutan supplies over 50% of India’s ferro silicon imports in 2025

Bhutan’s Electricity Regulatory Authority has approved a revised electricity tariff for supply by Bhutan Power Corporation effective 1 March 2026 to 30 June 2028. Energy-intensive industries, including ferro silicon plants, will now pay BTN 2.88/kWh, up from around BTN 2.60/kWh earlier. This is set to increase the production costs of ferro silicon slightly, lifting Bhutan’s prices and impacting the Indian market as well.

“It is too early to say by how much prices will increase following the rise in power tariffs. Most likely, the hike will be in the range of INR 1,500-2,000/t,” said a market participant.

Bhutan has a hydropower-dominated electricity system, with supply primarily coming from Druk Green Power hydropower plants along with newer solar projects. The revised framework incorporates transmission and distribution costs needed to support growing industrial demand while still maintaining relatively competitive power tariffs for energy-intensive industries that underpin Bhutan’s ferro alloys sector.

India imports a significant quantity of ferro silicon to meet demand from its steel and alloy industries, with imports totalling around 0.23 million tonnes (mnt) in 2025. Bhutan accounted for 52% (0.12 mnt) of India’s ferro silicon imports during the year, supported by geographical proximity and Bhutan’s hydropower-based electricity that enables energy-intensive ferro alloy production. Despite the slight increase in Bhutanese producers’ production costs, the country is expected to remain a key supplier to India due to its structural power cost advantage.

Notably, Bhutanese players announced March ferro silicon offers at INR 100,000/t ($1,091/t), reflecting an increase of INR 5,000/t ($54/t) m-o-m. Ferro silicon (Si 70%, 25-150 mm) prices in Bhutan were at INR 100,000/t ($1,091/t) exw, as per BigMint’s assessment on 6 March. Prices were stable in early March, as the market largely operated at the same levels as this month’s offers.