India: Ferro silicon prices increase amid limited offers, cautious sales

• Some plants in Bhutan to shut down for maintenance
  
  
• EC starts safeguard investigation into alloys imports
  
  

Indian ferro silicon (70%) prices witnessed an increase of INR 1,550/tonne (t) ($18/t) w-o-w as compared to the previous assessment on 16 December.

Prices went up, as the market saw a rise in inquiries and there were limited offers, given that some plants in northeastern India and Bhutan were either sold out or stocking up for maintenance scheduled later. Additionally, the market was slightly cautious amid expectations of a further price rise.

As per BigMint's assessment on 23 December, ferro silicon prices in India were at INR 103,850/t ($1,219/t) exw-Guwahati. In Bhutan as well, prices went up by INR 650/t ($8/t) w-o-w to INR 103,850/t ($1,219/t) exw. Deals for 300 t were carried out in both regions last week, within the price bracket of INR 103,000-104,000/t ($1,209-1,221/t) exw.

Market summary

Price rise expectations keep market wary: In northeastern India, either stock was sold out at many sellers, or plants were focused on fulfilling previously booked orders. Hence, for new inquiries, quotations from sellers were higher, and sales were made cautiously, as expectations were building up for a price increase in the days ahead.

In Bhutan, the BIS licence is due to expire for sellers, and many of them have already applied for renewal. Additionally, some are planning to go for shutdowns as well. Echoing these sentiments, a seller from Bhutan stated, "We have stopped all sales for the next three months and will shut down operations, probably from the first week of January."

However, on the export front, inquiries were limited, primarily from the European and US markets.

China's prices drop: Ferro silicon (Si:75%) prices in China fell by RMB 150/t ($21/t) w-o-w to RMB 6,320/t ($866/t) exw-Inner Mongolia on 23 December. There were reports of sellers adjusting their production volumes due to weakened demand from steel mills. No major impact was seen on the supply chain because of it.

In addition, ferro silicon futures for February 2025 delivery on the Zhengzhou Commodity Exchange (ZCE) fell by RMB 152/t ($21/t) w-o-w to RMB 6,224/t ($853/t) on 23 December.

EC initiates safeguard investigation: In a major development, the European Commission (EC) on 19 December stated that alloys imports into the EU have increased due to growing global overcapacity and the attractiveness of the EU's open market, coupled with a rising number of trade-restrictive measures in other major markets. Consequently, the commission has initiated investigations into the relevant segments, which include ferro silicon. If the investigation confirms that the EU industry suffers serious injury or threat of injury because of increased imports, the commission may propose safeguard measures, which would need to be supported by a qualified majority of EU member states.

Outlook

If the current scenario persists, we may see some upward movements in prices in the days ahead. However, chances are low for a sharp hike.