India: Ferro Silicon prices fall back as Bhutan reopens

Indian Ferro silicon prices escalated enormously in the past week after Bhutan went under lockdown. As only a handful of producers in North eastern region of India were producing, they were able to elevate their offers sharply on account of supply disruption from Bhutan. Prices skyrocketed by around INR 20,000/t in two weeks after lockdown was announced in Bhutan. However, after the dispatches have resumed prices went down in Guwahati and is expected to fall further.

Bhutanese producers are offering material at INR 82,000/t ex-Bhutan. However, they are mostly fulfilling previous orders and loading is constrained to only a small quantity per day. The logistical situation will take sometime to return to normalcy, as the producers are facing labour issues with the increase in covid cases. Yet, the producers of Bhutan are now optimistic about the fact that the huge stock piled up with them will now be sold. One of the major producers also quoted that the traders might get active in this scenario and buy the materials at INR 82,000/t and sell at higher prices.

In the meantime, the producers in urgent need of ferro silicon are booking material from Guwahati. But since there are very few producers who are operating there and most of them are overbooked, they are not willing to lower the offers to match Bhutan prices. Currently, the offers from Guwahati are at around INR 88,000/t

Future Outlook:
Prices in the domestic market are expected to normalize by next week. Meanwhile, export inquiries are still out of the question as the Malaysian 75% grade material is available at $1,040/t (INR 77,000).