India: Ferro silicon prices fall amid weak demand

Buyers' refusal to accept higher prices led to a drop in ferro silicon prices in the domestic market. Accumulation of inventory forced producers to reduce their offers, SteelMint notes.

According to SteelMint's assessment on 9 December, 2022 Guwahati-based producers were offering at around INR 120,000/t exw, while offers from Bhutan remained stable at INR 125,000/t exw. Meanwhile, export prices also remained stable at $1,600/t FOB India.

Factors impacting prices

Due to low demand, ferro silicon producers are under pressure which is forcing them to reduce offers in order to clear out inventory. The reduction in ferro silicon prices may also be marketing strategy used by the producers to attract enquiries, some sources said.

Input costs that were rangebound (quartz, LAMC, and electricity tariff) also discouraged producers from increasing their offers.

Steel producers resisted booking bulk volumes because steel prices are under pressure due to ample stocks. Buyers are willing to book small volumes at lower prices. This is another factor weighing on prices.

Why are offers from Bhutan stable?

Despite limited buying, Bhutanese prices have remained stable at around INR 125,000/t exw over the last two weeks, and producers have had little success in finding market acceptance.

Bhutan's smelters anticipate a seasonal increase in electricity tariff during winter, which has resulted in suppliers withdrawing their offers.

China market overview

Ferro silicon (75%) prices in China inched up w-o-w at RMB 8,550/t ($1,210/t) ex-Inner Mongolia. In comparison with the previous week, the market showed a rising trend. The futures market continues to fluctuate which is impacting the spot market. Ferro silicon prices are expected to remain stable in the short term.

Outlook
Most buyers are in wait-and-watch mode as market participants are anticipating a correction in ferro silicon prices in the near term.