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India: Ferro silicon prices remain stable amid market uncertainty, further hike expected

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Ferro Silicon

BigMint Bureau

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29 Oct 2024, 15:10 IST

India: Ferro silicon prices remain stable amid market uncertainty, further hike expected

Power tariffs rise for Meghalaya-based producers

Market awaits Bhutan's revised offers for Nov'24

Indian ferro silicon (70%) prices remained largely stable this week, with a slight drop of INR 200/tonne (t) ($2/t) as compared to the previous assessment on 21 October. Uncertainty surrounded the market, following a power tariff hike in Meghalaya and the expectation of new offers from Bhutan for November.

Ferro silicon prices in India were at INR 107,800/t ($1,282/t) exw-Guwahati, as per BigMint's assessment on 28 October. Bhutan's offers reduced by INR 1,000/t ($12/t) w-o-w to INR 107,000/t ($1,273/t) exw. Deals of around 500 t took place in Guwahati this week in the range of INR 107,500-108,000/t ($1,279-1,285/t) exw.

Weekly market update

Hike in Meghalaya power tariffs: Initially, ferro silicon offers were reduced following the resumption of operations at Meghalaya plants, with some price pressure expected after their products arrived in the market. However, this did not materialise, and in the latter half of the week, the Meghalaya State Electricity Regulatory Commission (MSERC) announced a significant hike of INR 1.47/kVah in electricity tariffs for ferro alloys producers, with rates now at INR 6.47/kVah. With around 8,000-8,500 units of power required to produce 1 t of ferro silicon, the cost of production might go up by INR 12,000-12,500/t ($143-149/t).

Echoing the same sentiments, a seller from Meghalaya informed BigMint, "Few plants might be closed down, as increased costs will make production unviable for them. Additionally, there is less demand in the market."

New offers awaited from Bhutan: Participants also stayed away from the market, preferring to wait for new prices to be announced from Bhutan for November 2024.

A Bhutanese producer said, "We are not offering as of now because we are waiting for the market to settle down."

Stable prices in China: Ferro silicon (Si: 75%) prices in China were unchanged w-o-w at RMB 6,660/t ($933/t) exw-Inner Mongolia. There were reports of production cuts and maintenance shutdowns in some areas, but with sufficient supplies in the domestic market, prices were unaffected.

However, ferro silicon futures for January 2025 delivery on the Zhengzhou Commodity Exchange (ZCE) increased by RMB 226/t ($32/t) w-o-w to RMB 6,592/t ($923/t) on 28 October.

Outlook

In the coming days, market trends will mostly be driven by revised offers following the power tariff hike in Meghalaya and the new prices to be announced from Bhutanese suppliers.