India: Ferro silicon prices fall to over 2-year low, may drop further
Indian ferro silicon (70%) prices have continued their downward trend since May 2023. Prices decreased further by INR 1,300/t w-o-w as demand remained weak and consumers ...
Indian ferro silicon (70%) prices have continued their downward trend since May 2023. Prices decreased further by INR 1,300/t w-o-w as demand remained weak and consumers continued to bargain, which forced suppliers to reduce prices.
Prices have fallen to an over 2-year low, as per SteelMint assessment.
According to SteelMint's assessment on 7 July, Indian ferro silicon prices stood at INR 108,700/t exw-Guwahati. Offers from Bhutan fell by 200 INR/t over the course of the week but were almost stable at INR 109,800/t.
Factors affecting prices
Uncertainty surrounding prices: Producers in Bhutan who floated an offer at INR 110,000/t this month held prices firm and offers just sligtly decreased by INR 200/t. Most of the deals from Bhutan (around 1,000 t) happened at offers floated earlier.
However, producers in the North East were unable to compete with Bhutan's prices, and were forced to sell material at lower prices because buyers were not willing to negotiate.
In addition, some manufacturers were not willing to sell at lower prices. Over and above the bearish stainless steel market, sluggish demand was a key factor dragging prices lower, which kept prices low even after they hit a two-year low.
Chinese ferro silicon prices fall further: China's ferro silicon (75%) prices dropped to RMB 7,000-7,100/t ($968-981/t) from RMB 7,220-7,340/t ($998-1,015/t) w-o-w. Costs varied as silicon metal costs declined. China's main silicon metal-producing region Sichuan and other industries cut production as a result, which resulted in lower operating rates. Summer has arrived in China and due to the extreme heat, drought, and high electricity prices, there may be power outages in the coming weeks which might affect production.
Outlook
Given the current scenario, prices in India may continue to decline through to the end of August due to lacklustre steel demand. However, prices in Bhutan are expected to remain range-bound at current levels with minor fluctuations.
