Indian ferro silicon prices have been on a declining trend since the end of last week due to lack of domestic demand and a drop in Chinese prices. Some producers are cutting prices to meet their year-end targets while others, who have enough orders for the month, are refraining from making any offers.
SteelMint assessed the current market prices for ferro silicon (70%) at INR 171,000/tonne (t) exw-Guwahati while Bhutan offers were at INR 177,500/t exw on 16 Dec’21. Overall, the Indian and Bhutanese producers are offering in the range of INR 170,000-180,000/t exw.
Why did ferro silicon prices fall?
- In northern India, many foundries were ordered to shut down operations to curb air pollution which resulted in weak inquiries from this region, leading to a drop in ferro silicon prices.
- Ferro silicon producers are under pressure to meet their year-end targets. This forced them to reduce offers to clear out inventories.
One of the major producers explained, “The decline in ferro silicon prices is seasonal and a strategy from producers to attract market inquiries.” - With steel prices going down, steelmakers are also less likely to book material at higher prices which forced producers to lower their offers.
- Range-bound input costs (quartz, LAMC, and electricity tariffs) also discouraged ferro silicon producers from increasing their offers.
- Ferro silicon prices in China also fell last week after some major steel producers concluded tenders at lower levels. Meanwhile, other producers went into a ‘wait and watch’ mode, anticipating a further decline. Thus, thin inquiries and weak downstream demand in China resulted in a decline in market prices. However, this has not yet affected Indian ferro silicon prices.
Outlook
Indian ferro silicon prices are expected to remain stable this week due to weak domestic demand and firm raw material prices.
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