India: Bullish Sentiment Ripples through Ferro Silicon Market

Ferro Silicon producers were observed to be bullish on demand-supply imbalance.

Market participants were of optimistic view as producers and traders have been receiving new inquiries.

“China witnessed further Ferro Silicon production cut, ordered by its government to curb pollution, creating an additional shortage of the commodity,” mentioned a producer source referring to the rise in Ferro Silicon price in international market.

However, contradicting the same, another source said that there are talks of some plants in China may get permission to operate but not at full capacity. Hence, supply situation might get some respite.

“Global supply tightness has been pushing the prices up and some of the sellers are heard to hold the commodity in expectation of rising offers in near term,” said a source. He further added that Malaysia has been holding its offers at USD 1,900/MT but China is trying to push it upwards.

In line with rising global offers, the Ferro Silicon export offers from Indian and Bhutanese producers also escalated, and is assessed at around USD 1,900/MT FOB Kolkata. However, the producers are finding it tough to cope with increasing demand as they have been low on inventory.

Ferro Silicon offers remain firm in the domestic market at INR 1,10,000/MT for both Ex-Bhutan and Ex-Guwahati. However, a source mentioned that few deals have also been concluded at slightly lower levels, as a few producers needed to meet their monthly expenses and decided to drop the price to conclude immediate sales.

While discussing the impact of new players in the market, another source revealed to SteelMint that fair-weather Ferro Silicon producers are generally exporting their commodity through traders, and are likely to find it difficult to sell in the domestic market as they are not regular in their production. Hence, the domestic market is to remain unaffected with additional players.

On the future outlook, Ferro Silicon offers are expected to remain firm and a downturn in prices is very much unlikely in consonance with the current market scenario.