India: Ferro Silicon Plants plagued with Shortage of Charcoal Supply

Indian Ferro Silicon prices escalated in the past week amid short supply. Producers are facing a shortage of Charcoal, which is used as a reductant, amid floods in South India and this has led to substantially reduced production. A Guwahati based producer shared that even after the prices are higher, the producers cannot operate in full capacity due to raw material shortage. Moreover, the Chinese market is closed amid New Year holidays, and meanwhile, transportation within the country remains restricted. Although the Chinese New Year has been extended up to February 3rd, there is little expectation that the workers would return comparatively later than usual due to travel restrictions.

In the domestic market, the offer prices for Bhutanese Ferro Silicon increased to INR 88,000/MT Ex-plant for 70% grade. Meanwhile, offers from Guwahati based producers are at around INR 88,000-89,000/MT Ex-plant. In the export market, deals are absent as the domestic offers are much more lucrative in the present market scenario. Imports are readily taking place and material from Russia is in high demand.

On the future outlook, the producers are expecting the charcoal supply to be normal by next month and the production may get stable. However, market participants are in a wait and watch mode as to how the market reacts post the Chinese New Year holidays.