India: Ferro silicon prices inch down w-o-w amid weak end-user demand

Indian ferro silicon prices fell marginally by INR 3,500/t w-o-w with negligible trade seen last week. The market witnessed weak demand as some buyers were in a wait-and-watch mode on expectation of a further price drop.

According to the SteelMint assessment on 23 September 2022, ferro silicon (70% grade) prices stood at INR 141,500/t-143,500/t in Guwahati and Bhutan on exw basis. Around 600 t of trade volumes were recorded this week.

On one side, end-user demand is limited at the current levels. Moreover, imported material coming is cheaper compared to domestic offers. Hence, buyers are anticipating a drop in ferro silicon prices in the near-term.

On the other hand, producers are unable to reduce prices due to high production costs.

On the supply side, it is expected that production of ferro silicon will increase in the coming days. "Several ferro manganese producers are shifting to ferro silicon on better margins, resulting in rise in production. Prices may go down to INR 140,000/t exw," a seller informed SteelMint.

China market overview

China's ferro silicon (75%) prices remained unchanged w-o-w at RMB 8,100/t ($1,141/t), as assessed on 22 September. However, prices improved on 23 September due to a tight supply and rising future prices.

Ferro silicon futures on the Zhengzhou Commodity Exchange (ZCE) rose by 4% w-o-w to RMB 8,401/t ($1,180/t) for November deliveries, as per SteelMint assessment on 23 September.

Enquiries also increased as market participants were in a hurry to complete their transactions before the upcoming Golden Week holidays (1 October - 7 October).

Outlook

SteelMint notes that Indian domestic ferro silicon prices may remain under pressure as buyers are unlikely to accept higher domestic offers when the imported material is cheaper.