Bhutan's Ferro silicon prices tumble amid high inventory

Bhutan's ferro silicon prices dropped by 7% w-o-w in early February due to selling pressure and high inventories held with the producers.

According to SteelMint's assessment on 4 Feb'22, Bhutanese producers have started offering Si-70% at INR 145,000/t exw, while Guwahati's smelters are following suit, offering at around INR 145,500/t exw. However, some producers have offered even lower to get assured longer-term business.

Weekly highlights

• Bhutan's producers ceased selling in the spot market in early CY'22 after seeing prices fall, expecting a spike in the near future. This resulted in an increase in inventories. High inventories created a selling pressure. As a consequence, prices fell.
  
  
• Ferro silicon producers received strong inquiries since the end of January, but buyers were reluctant to book the material at higher levels and have started bargaining hard. Such negotiations brought down ferro silicon prices in early February. Further, this led to a deal of about 2,500 t in the first week of February.
  
  
• In addition, imported materials have arrived in India, and many buyers are turning towards these due to lower prices. Maintenance of price parity was also a contributing factor to the downtrend in domestic prices, as buyers wanted to keep domestic materials competitive.
  
  
• On the other hand, the rise in flat steel prices by 4% w-o-w, due to high raw material costs, is preventing ferro silicon smelters from reducing their prices. Moreover, rising coke prices are also causing smelters to reduce their offers.
  
  

Outlook
Most ferro silicon producers are expecting prices to bounce back after the Chinese market reopens post the New Year holidays.