India: Tight supply fuels rise in ferro silicon prices
Ferro silicon prices have strengthened further this week as buyers sought to secure deliveries following reduced production in Bhutan and expected logistical delays durin...
Ferro silicon prices have strengthened further this week as buyers sought to secure deliveries following reduced production in Bhutan and expected logistical delays during the rainy season.
Indian ferro silicon prices have risen by INR 3,750/tonne (t) w-o-w to match Bhutan's new price announcement for July dispatches.
According to SteelMint's assessment on 8 July, ferro silicon prices are at around INR 150,000/t both exw-Guwahati and Bhutan, with around 3,000 t of deals recorded at the offered price this week.
The supply-demand mismatch caused by production curtailment and supply disruptions amid landslides in the north-eastern region of the country prompted smelters to increase their offers by about INR 16,000/t since the end of June. Due to the fact that most buyers accepted the prices, producers were unwilling to lower their offers. As a result, producers kept their offers high.
Meanwhile, there are limited imports coming in with the rupee depreciating, which is keeping supplies tight.
SAIL purchase tender concluded: Steel Authority of India Ltd. (SAIL) concluded its procurement tender for 18,395 t of ferro silicon (70%) at around INR 158,900/t on a weighted average landed cost net of input tax credit basis on 6 July. This also supported ferro silicon prices.
China market overview:
China's ferro silicon prices dropped by RMB 300/t to RMB 8,700/t ($1,298/t) exw-Inner Mongolia amid slow purchase. Meanwhile, major Chinese steelmaker HBIS Group closed a tender for ferro silicon (72%) at RMB 8,200/t ($1,223/t) for July delivery, down RMB 1,400/t ($209/t) from the June price.
China's ferro silicon futures were down by 2% today due to weak demand. Ferro silicon futures on the Zhengzhou Commodity Exchange (ZCE) for September 2022 delivery fell to RMB 8,086/t ($1,206/t).
Outlook:
Indian ferro silicon prices will likely stabilise amidst a sluggish steel market and reduced supplies. But prices may trend lower in the coming month as plants that have gone into maintenance resume production.
