India: Ferro silicon prices inch fall to maintain parity with Bhutan offers

Indian ferro silicon (70%) prices fell by INR 1,850/t this week in order to maintain parity with the offers from Bhutan. Despite continued power outages in Meghalaya, a key region for the production of ferro silicon, prices decreased amid weak demand.

According to SteeelMint's assessment on 12 May, 2023, around 1,200-1,300 tonnes of ferro silicon (70%) trades were concluded at INR 122,800-1,23,000/t exw both from Guwahati and Bhutan.

Factors affecting prices

Due to high production expenses, manufacturers located in Guwahati were previously unwilling to offer material at reduced prices. On the other hand, majority of purchasers were also reluctant to book bulk quantities at higher prices as they felt prices could further drop in the near future. This caused the prices to drop since the producers wanted the market to continue operating despite persistent power cut issues in the north eastern belt which reduced their profit margins.

Moreover, stainless steel demand was also on a downward trend as market participants became cautious and adopted a wait-and-watch approach which pushed down prices.

In addition, global prices were also under pressure which impacted Indian prices. Meanwhile, Chinese ferro silicon (72%) prices went up, while those for 75% went down which caused the prices to fluctuate. Declining output, insufficient downstream orders, and weaker market sentiments also had an impact on prices. Chinese steel mills are still short on supplies which is leading to inventory pressure.

Outlook

Because of the current market scenario and weak demand, prices are likely to remain range-bound with minor fluctuations. However, if demand increases, then the prices are likely to increase in the near future owing to supply-demand mismatch.