India: Ferro silicon prices hit historic highs amidst limited supply

Indian ferro silicon prices continued their northward movement since the beginning of the week owing to robust inquiries in the market. Prices, for the first time, have surpassed the INR 158,000/tonne (t) exw-mark in 2021 amid supply-constraints and demand pick-up from steel mills.

Current market prices of ferro silicon are hovering at INR 155,000-160,000/t exw-Guwahati, as assessed by SteelMint on 22 Sept. Some sellers are misleading the market, it was heard. On the other hand, Bhutanese producers are offering at INR 145,000/t exw. Meanwhile, ferro silicon prices saw a hike of around INR 16,000/t in a span of two days this week.

Robust inquiries give elbow room to producers
The Indian market is witnessing an ample amount of ferro silicon inquiries. Rising prices on a daily basis have pressured buyers to book the material before any further hike. As a result, sellers have also increased prices to preserve their margins which is further limiting buyers from booking larger quantities.

At the current level, Guwahati’s ferro silicon prices have increased by 24% m-o-m on 22 Sept as against the corresponding period last month, which is also threatening the buyers from booking the material. However, buyers with exhausted inventory are negotiating at the lowest level, but the shortage of material is compelling them to lift the material at all-time high prices.

Worldwide shortage supports prices in India
According to sources, there is a global supply tightness in ferro silicon. Ferro silicon prices in the European market are also registering the highest levels due to strong demand and short supply. Container unavailability is also fuelling the tight supply situation in the European market. Ferro silicon prices are booming in China’s market due to production cuts. This is further allowing the Indian producers scope to hike offers in the local market.

Outlook
Ferro silicon demand is rising. Buyers seem to have been impacted by tight supply in the spot market. The supply-demand mismatch might take ferro silicon prices to new levels.