Indian ferrosilicon prices fell thrice since last week as the producers pressed the panic button. Meanwhile, most buyers who have enough stock believe that the prices should further come down. Prices of ferrosilicon started escalating since December due to the increase in international prices and peaked in January. Producers believe that the increase was unrealistic and now it is correcting to normal levels again.
A Guwahati based producer shared with SteelMint that the buyers are mostly steel manufacturers. Traders are resisting to buy as they anticipate the prices will fall further. Currently, prices are at INR 94,000/t both in Guwahati and Bhutan. However, due to panic amongst a few producers, deals were also heard to be concluded at lower than the stated levels. Meanwhile, the inquiries in exports are higher, but producers are resisting due to container unavailability and higher freight costs.
Meanwhile, exports inquiries are picking up and producers are certain that once the Chinese market opens post-New-Year holidays, international prices would pick up again. Many producers who hold better position are withholding their supplies, as they foresee a short-term dip in the price trend, which they are willing to pass. Currently, producers are offering at around $ 1340/t, which is down by $100/t in line with the falling domestic prices.
In the meantime, Chinese ferrosilicon prices are set to increase after the New Year due to stricter electricity norms in Inner Mongolia, which is the largest Ferrosilicon producing region of China. The prices closed at $1410/t in China, before the holidays and were stable in the last few days due to tepid buying.
Outlook:
The market remains pessimistic and the prices are expected to fall further in line with limited trades and producers seem desperate to liquidate stocks.
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