Indian ferro silicon prices drop further on higher supplies

Indian ferro silicon (70%) prices inched down by INR 700/t w-o-w. Prices fell as sellers sold material apprehending further price cuts even as demand remained weak.

In addition, as more manufacturers and suppliers entered the market, competition intensified, leading to a decrease in prices. This increased supply and presented cost-saving opportunities for industries that rely on ferro silicon.

According to SteelMint's assessment on 14 July, Indian ferro silicon prices stood at INR 108,000/t exw-Guwahati. With a slight decrease of INR 200/t w-o-w, Bhutan's offers stayed essentially same at INR 109,600/t.

Factors affecting prices

Buyers' haggling power: As buyers negotiated harder due to the decline in demand, the majority of North East Indian manufacturers were obliged to sell material at lower prices. Since prices have fallen to an over two-year low, vendors are unsure of the direction the market would take and, therefore, offered their material at lower prices. Around 1,300 t of deals were concluded in the range of INR 107,000-110,000/t.

Bhutanese manufacturers, however, have held fast to their offers, as the majority of them have been arranging supplies for orders placed beforehand. Dispatches may take longer because of the ongoing flood-like situation in the region. At the range of INR 108,000-110,000/t, SteelMint heard 2,300 t of trades to have occurred from Bhutan.

Impact of Chinese market: Chinese ferro silicon (Si:75%) prices remained stable this week at RMB 7,000-7,100/t ($981-995/t). Rise in prices of semicoke, a crucial raw material for manufacturing ferro silicon, also contributed to an increase in production costs. In anticipation of potential price drops, buyers grew more cautious, and trading activities decreased.

Outlook

As a result of sluggish steel demand amid intense bargaining in the market, domestic prices are expected to decline. Bhutan's prices, on the other hand, are projected to stay rangebound.