India: Ferro silicon prices drop amid slow buying

Indian ferro silicon prices fell by INR 8,000/t w-o-w in a weak market as participants adopted a cautious approach in procuring material.

According to SteelMint's assessment on 3 June 2022, Bhutan's producers started offering ferro silicon (70%) at INR 128,000/t exw, while Guwahati producers followed suit.

Most of the market participants were in wait-and-watch mode, watching the price fall since May 2022. Thus, smelters had to reduce their offers at the beginning of the month to boost buying.

Despite the price reduction, SteelMint recorded transactions of around 1,000t this week. The main reasons for the slow purchases were production curtailment in stainless-steel and at foundries due to supply-demand mismatch.

One of the major producers explained, "Most of the buyers are booking material lower than their monthly consumption. We were forced to reduce offers because we had ample stocks in hand."

However, a bearish market did not affect some producers, who were busy catering to government tenders.

China market overview:

China's ferro silicon (75%) prices inched up marginally by RMB 100/t ($15/t) w-o-w to RMB 9,300/t ($1,396/t) exw-Inner Mongolia. Meanwhile, ferro silicon futures on the Zhengzhou Commodity Exchange (ZCE) for September 2022 delivery rose by 5% w-o-w to RMB 9,344/t ($1,403/t) on 2 June 2022. Due to the arrival of the Dragon Boat Festival, market transactions were average. Ferro silicon prices are expected to remain stable in the near future.

Outlook
With steel prices under pressure in a weak market, ferro silicon prices are expected to remain range-bound in the near future.