India: Ferro silicon prices rise amidst robust demand

Indian ferro silicon producers have increased prices by around INR 6,000/t w-o-w amidst bullish demand in the market, sources informed SteelMint. Ample demand is giving opportunity to producers to increase their offers on a daily basis as well.

Currently, Indian smelters are offering at INR 134,200/t exw-Guwahati. Meanwhile, Bhutanese producers have also started to offer at around INR 130,000/t exw in line with better demand. However, few sellers have offered lower prices to long-term buyers.

Indian ferro silicon prices have been decreasing gradually since Aug'21 owing to tepid buying interest from buyers. Prices decreased by up to 124,000/t exw in early Sept'21 after mid-May. Indian smelters reduced the prices in the previous week to maintain the price parity with Bhutanese offers which influenced domestic buyers. But, the flood of demand in the market allowed the sellers to raise offers.

One of the major producers from Bhutan said that "the price of INR 124,000/t was an eyewash to corner all stocks", which misled the market by creating low inventory at producers' level and supported the increase in prices.

Steel mills showed patience to book ferro silicon at lower prices. So, they actively started to book the material from early Sept when the prices were on a downtrend. Some steel manufacturers and traders got the profit on booking the material at a lower price. This raised demand in the market which further resulted in the supply shortage. Hence, the supply-demand mis-match influenced the producers to increase the offers of ferro silicon.

"If the supply-demand dynamics persist further, then it will take no time for ferro silicon prices to register a new high," said another major producer.

Meanwhile, a few producers have held on to stocks for government tenders and large steel manufacturers, which is also leading to less supply in the market.

In addition, the Indian market is getting robust inquiries from Europe as the acute shortage of ferro silicon there is pressuring buyers to focus on imported material despite the high-cost container shortage. This further ignited the prices of Indian ferro silicon.

Outlook

Ferro silicon producers are optimistic about the current market prices of ferro silicon. It is expected that supply shortage and increased export demand might result in bullish sentiments in the coming weeks.