Limited trade on buyer caution has piled on pressure on the Ferro Silicon producers. However, Ferro Silicon prices in India could soon start going up.
SteelMint assessed that there is a liquidity crunch in the market for Ferro Silicon producers in the domestic market. As year-end approaches, few plants are in urgent need for cash for payment towards Advance Tax. Hence, the prices have been drifting down on high competition.
“This is a seasonal effect which is taking place in the market,” said a source justifying the lowering prices in spite of regular inquiries.
The current price of Ferro Silicon grade 70% is assessed at around INR 85,000/MT (Ex-Bhutan and Ex-Guwahati). However, few deals have also been concluded at INR 84,000/MT.
In the export market, demand from overseas was reportedly weak on the backdrop of Christmas holidays.
Indian and Bhutanese producers are offering Ferro Silicon at USD 1,270/MT FOB Kolkata, but there is no chance of any export deals to be concluded until January.
However, it is pertinent to note that Ferro Silicon prices could soon bounce back on a confluence of factors. Firstly, there is an upcoming SAIL tender for 11,000 MT, for which around 3000 MT per month will be diverted from the open market. Secondly, one of the major players in Bhutan is going for maintenance in January, for which another 3000 MT will be taken out off the market. Thirdly, Chinese curb on production could provide further push to prices.
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