India’s ferro silicon prices dropped by over INR 10,000/t w-o-w amid dull demand for stainless steel. Many small buyers opted not to purchase materials due to high prices.
According to the assessment on 21 April 2022, most Guwahati-based producers offered around INR 160,000/t exw, while a few offered at around INR 165,000/t exw to follow the Bhutanese offers. But bulk deals of around 4000 t have only been completed at lower levels. Bhutanese producers are offering around INR 163,000-165,000/t exw.
This week, SteelMint observed weak ferro silicon demand at higher offers. As the stainless-steel market remains bearish, buyers are constantly trying to pull down prices. Since stainless steel prices remain high, export demand is also stagnant. This resulted in slow buying and a drop in ferro silicon prices.
In addition, ferro silicon demand was weak because most consumers are speculating that prices may move lower on slow buying interest, thereby escalating selling pressure. Prices also fell due to this.
In addition, dull buying was attributed to oversupply in the spot market. Producers had to lower their offers as a consequence.
Chinese market review:
The ferro silicon price in China (75%) rose to a 5-month high of RMB 1,150-1,550/t to RMB 11,750-12,200/t exw from Qinghai and Shanxi. The bidding prices of steel mills were high recently, and ferro silicon plants had limited spot resources. Prices in the spot market were also supported by higher ferro silicon prices on the futures exchange and limited stocks of suppliers. In the near future, ferro silicon prices are expected to be largely stable, with a few markets seeing increased prices.
Outlook
As the deadline for BIS certification by the Ministry of Steel approaches, Indian producers remain optimistic despite slow buying. This could present an opportunity to Indian producers, as India is a net importer of ferro silicon, and if the deadline for BIS certification is not extended, producers from many other countries, including Bhutan, will have to stop exports to India. As a result, producers anticipate a hike in ferro silicon prices in the near future due to shortages.
Moreover, rising coal and coke prices are also pointing to a possible uptrend in ferro silicon prices.
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