- Buyers cautious amidst price uncertainty, inventory build-up
- SAIL-RSP auction impacts pricing
Indian ferro silicon (70%) prices experienced a weekly drop of INR 950/t ($11/t) compared to the assessment on 19 February. Bhutanese producers reduced their offers by approximately INR 1,600/t ($19/t) w-o-w due to selling pressure and abundant inventory.
According to BigMint’s assessment on 26 February, Indian ferro silicon prices were recorded at INR 105,750/t ($1,276/t) exw-Guwahati, while Bhutan’s prices stood at INR 105,250/t ($1,270/t) exw.
Market overview
- Market dynamics, producers’ challenge: Bhutanese producers are grappling with ample stocks due to delays in receiving BIS certificate renewals. Meanwhile, moderate demand has prompted buyers to hold off on bulk bookings, anticipating a potential price decline. Major players foresee, “Increased interest from mills once offers drop to INR 100,000/t exw, but current offers align closely with production costs, posing challenges amid selling pressure.” Additionally, Bhutan’s reliance on Indian electricity imports until April is further inhibiting producers from lowering their offers.
- SAIL-RSP procurement impact, market response: SAIL-RSP, acting as the central procurement agency for SAIL, recently secured 15,870 t of ferro silicon (Si:70%, 10-100 mm) for its seven plants across India at approximately INR 104,400/t ($1,259/t)DAP, exerting influence on the market. Subsequently, small mills have initiated aggressive negotiations to obtain the material at reduced rates.
Ferro silicon futures, however, showed a w-o-w increase of RMB 80/t ($11/t) to RMB 6,628/t ($924/t) t on 26 February on China’s Zhengzhou Commodity Exchange (ZCE) for the March 2024 delivery contract.
Outlook
Based on insights gathered from market participants, demand appears moderate, with industry players eagerly awaiting Bhutan’s new price announcement for March 2024. It is expected that prices may start at around INR 104,000-105,000/t exw.