India: Ferro silicon prices drop on sluggish demand

Indian ferro silicon prices fell marginally by INR 2,750/t w-o-w owing to sluggish demand as many buyers are in wait-and-watch mode with market participants anticipating a correction in ferro silicon prices next month.

According to SteelMint's assessment on 29 April, 2022, Guwahati-based producers were offering at around INR 157,250/t exw. However, some producers concluded deals below INR 155,000/t exw basis, while Bhutan's producers stuck to INR 160,000/t exw.

Market Highlights

• The next month will bring new price openings for buyers. Amid low demand in the domestic market, producers reduced their offers and were able to close around 700 t of deals this week, as per SteelMint.
  
  
• Additionally, many foundries have reduced production and stainless steel prices are still under pressure owing to stagnant demand. This has also resulted in weak demand, which has led to producers reducing their prices.
  
  
• Moreover, there are some producers working on major tender orders while others are looking forward to upcoming tenders. There are also some producers booked for this month. Others faced selling pressure and lowered their offers.
  
  
• Meghalaya, however, is experiencing power outages for 3 hours every day. Production will be negatively affected, and prices could also be affected. Producers are resisting from lowering offers.
  
  

China's market overview

This week, the domestic ferro silicon prices fell slightly by around RMB 250/t ($38/t), with offers for ferro silicon (75%) at around RMB 11,500-11,900 /t ($1,743- 1,803/t) exw Qinghai and Shanxi. Market confidence suffered a setback as a result of the downward pressure on the economy, the spread of the epidemic and exchange rate fluctuations. As the market approaches the May Day holiday and the downward pressure increases, the performance has significantly slowed. This resulted in fall in prices.

Outlook

Indian buyers are optimistic and are anticipating further downtrend in prices. However, power cuts in Meghalaya may turn market sentiments negative.