India: Ferro silicon prices increase on improved domestic demand

Indian ferro silicon prices have increased on better demand from the domestic market. Bhutanese producers revised their prices at INR 82,000/t on Wednesday. However, at the start of the week few deals were also concluded at INR 84,000/t as the Indian producers started to quote higher prices in the absence of a price release from Bhutan.

Meanwhile, a few export orders were concluded at $1190-1200/t CNF Europe, but most of the producers of ferro silicon stated that export deals at these prices are not feasible as the realization from sales in the domestic market is much higher. In the meantime, ferro silicon from Malaysia is being quoted at INR 90,000/t, which is encouraging the domestic producers to increase the prices further.

The cost of production is one of the major reason behind the increase in ferro silicon prices as there is a labour shortage in Bhutan. Most of the labour in Bhutan are from India and due to the current pandemic, the restrictions are strict and therefore the manpower cost has increased. Also, during December, the charcoal shortage has hit the market, which has also increased the carbon prices for the production of ferro silicon.

Current Assessments:
Ex Bhutan: INR 82,000-83,000/t;
Ex- Guwahati: INR 82,000/t;
FOB India: $1120/t;
FOB China: $1140/t

Outlook:
Ferro silicon prices may increase marginally depending on the demand and stock available with the producers as most of the producers are catering to large tenders.