Indian ferro silicon prices have reverted to mid-March, 2022 levels due to weak demand amid downtrending steel prices. Meanwhile, the recent export duty revision on steel is also impacting the entire ferro alloys market.
According to SteelMint’s assessment on 27 May 2022, Guwahati-based producers were offering ferro silicon Si-70% grade at INR 136,000/tonnes(t)-exw, down 2% from INR 138,650/t a week ago. Bhutan’s offers were at INR 137,800/t-exw against INR 139,400/t a week back. However, some are offering even lower to meet their monthly targets.
Highlights:
Domestic stainless-steel producers and foundry units have reduced their production in a bearish market. In addition, traders are showing lesser interest in advance bookings due to the continuously falling prices. So, overall, muted demand has impacted ferro silicon prices.
Furthermore, ferro silicon plants are running at full capacity in both the major producing belts of Guwahati and Bhutan. As a result, this intensified the oversupply in the market. Moreover, some producers started selling at lower than the prevailing prices of around INR 135,000/t exw to clear their old inventories. Around 1,000 t of deals were recorded by SteelMint this week due weak demand.
Meanwhile, some buyers were waiting for new price announcements from Bhutan’s producers. Many of them were anticipating that prices might fall further.
China market review
Chinese ferro silicon (75%) prices inched up by around RMB 50/t ($7.42/t) to RMB 9,200/t ($1,365/t) exw- Inner Mongolia as inquiries picked up post-an easing of Covid restrictions. Meanwhile, futures prices also inched up by 1% w-o-w to RMB 8,934/t ($ 1,326/t) on 27 May. This is also encouraging Chinese smelters to not reduce their offers. It is expected that ferro silicon prices will mainly be stable in the near future.
Outlook:
Market participants expect prices to fall further by up to INR 130,000/t exw in the upcoming week. The prevailing muted demand and sales pressures on producers may result in further price drops.
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