India: Ferro silicon prices rise further amid supply crunch

Indian ferro silicon prices have surged by INR 13,500-15,300/t since the last assessment on 17 June 2022. The price surge was propelled by supply disruptions amid heavy rainfall and land slides in the north-east.

According to SteelMint's assessment on 21 June 2022, most producers started offering at around INR 145,000-150,000/t exw-Guwahati and Bhutan. Some of them even concluded deals at INR 155,000/t on exw basis.

As a result, SteelMint updated its prices ahead of schedule, on 21 June 2022 at 16:14 hrs.

It also published an article on 18 June 2022, expecting a hike in prices of ferro silicon due to several factors.

Factoring increasing ferro silicon prices:

• Supply disruptions: From the end of last week, Indian smelters started receiving healthy inquiries from buyers who expected supply disruptions as the north-east has been inundated by incessant rainfall from June 13.In addition, several Bhutanese producers contemplated maintenance shutdowns. Buyers, expecting a supply crunch, panicked and enquiries poured in. In response, after a gap of around two months, sellers hiked their offers. However, buyers resisted booking material at such higher prices for immediate delivery because the seasonal floods in the north-east have disrupted transport and other services.
  
  
• Producers hold offers: Many major producers held their offers and were more focused on the upcoming reverse auctions of major steel mills.Meanwhile, some stopped offering in the hope of further price hikes while some plants started diverting material to Europe as they felt the Indian market is saturated at present. The rest of the smelters are booked for a month and not in a hurry to sell.
  
  

Outlook:
In the present scenario, ferro silicon producers may increase prices amid the supply shortage.

Moreover, several market participants told SteelMint that prices will remain volatile in the near term amid the supply-demand mismatch.