India: Ferro silicon prices remain stable on moderate demand, limited supply

Indian ferro silicon prices remained stable w-o-w amidst moderate demand as major buyers have already booked large quantities through major tenders that had been held last week. The rest are waiting for new prices to be announced by Bhutan in the new year.

According to SteelMint, Indian producers are offering at INR 170,000/t exw-Guwahati for 70% grade. However, those with sufficient inventory are offering at even lower prices. Furthermore, Bhutan’s prices fell this week by INR 15,000/t to INR 160,000/t-exw compared to last week’s assessment.

Market highlights

• The major tenders were concluded last week at around INR 171,700 /t (for around 850 tonnes) and INR 172,900 / t (for around 270 t) on a delivered-to-plant basis. Following this, major ferro silicon producers are booked for catering to major steel producers. In addition, some are booked until Jan’22 to meet domestic demand, which resulted in limited inventories with producers and stabilized the ferro silicon prices.
• The steel market saw moderate demand from small steel mills this week, as many buyers are anticipating that new prices will open in the first month of CY’22. Furthermore, some buyers are anticipating further price drops, narrowing the market’s demand. Likewise, SteelMint did not catch many deals for the week. The ones that did happen comprised mostly lower-grade fines material.
• In addition, steel mills are experiencing high inventory pressure because demand is weak. Steel prices are expected to slide in the next few weeks. This has led to small steel manufacturers refraining from booking large quantities at high prices. This has resulted in moderate demand for ferro silicon in the spot market and is also the reason behind the stable ferro silicon prices.
• Furthermore, Bhutan has enough inventory to deliver next month. Thus, producers from Bhutan reduced ferro silicon offers to attract business. Although Bhutan’s prices did not inspire Guwahati’s producer to follow.

Outlook
Most buyers are in wait-and-watch mode as market participants are anticipating a correction in ferro silicon prices in the first month of CY’22.