Indian ferro silicon prices inched down early in March 2023 in an effort to attract buying interest amid selling pressures.
According to SteelMint’s assessment on 10 March, Bhutan had opened new prices for March at INR 120,000/t exw and retained them this week due to slow buying while majority of the Guwahati producers followed suit and offered at INR 120,000/t exw as well.
Factors keeping prices down
- Slow buying in domestic market: Despite price reductions, domestic ferro silicon demand remained modest. A few consumers were still waiting for prices to decrease further before making any purchases. However, despite electricity available in adequate quantities, Bhutanese smelters had to cut their offers because of the inventory pile-up in the initial part of the month.
Moreover, during winter, India’s power production was insufficient to fulfil Bhutan’s domestic demand and this Himalayan kingdom paid a record high price for electricity imported from India. - Fall in global prices: Ferro silicon prices remained stagnant throughout the world, but particularly in China due to weak demand as Ningxia, Qinghai, Shaanxi, etc had reduced production and closed furnaces for maintenance. As a result, in order to compete with cheap international pricing, local ferro silicon prices decreased.
- Steel, ferro alloys markets under pressure: The domestic steel market remained under pressure amid moderate trading activity even at lower prices. Due to the Holi festival, demand was low this week and ahead of the festival too. Moreover, the price decline in other ferro alloys (such as manganese alloys and ferro chrome) discouraged demand for ferro silicon.
Outlook
Weak local demand, along with expectations from Indian buyers of further price drops will keep ferro silicon under pressure in the coming week, according to sources.
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