Indian ferro silicon producers raise offers following uptick in Bhutan prices

Indian ferro silicon (70%) prices bounced back to maintain price parity with rising Bhutanese offers.

According to SteelMint's assessment on 25 Nov'21, ferro silicon prices (70%) spiked by INR 12,500/tonne (t) w-o-w to INR 190,000/ t exw- Guwahati, while Bhutanese producers were offering at INR 200,000/ t exw. However, some producers continued selling at low rates this week.

Why did Bhutan producers increase offers?

• To maintain price parity: China's ferro silicon prices (72-75%) began rebounding since 24 Nov'21, owing to a sudden rise in Chinese futures w-o-w. A rebound in coal prices in line with increased electricity tariffs also supported ferro silicon prices in China. As per an assessment on 25 Nov'21, Chinese ferro silicon prices (75%) rose by RMB 150-350/t ($23-55/t) exw in different provinces with current prices hovering at around RMB 9,500-10,200/t ($1,486-1,596/t) exw-China. This encouraged Bhutanese producers to increase their offers for fresh dispatches and India followed suit. 
  
  
• Limited supply: According to reliable sources, there is limited material available with the Bhutan producers to deliver in the spot market. Due to decreasing ferro silicon prices in the early half of the month, buyers started selling off their material in fear of a further fall in prices, which led to limited inventory at the producers' end. Inadequate supply also encouraged Bhutanese producers to inch up their offers. Irrespective of the change in Indian and Bhutanese price lists, buyers are still reluctant. Chinese material is still the best option but shipments to India will take approximately 45 days which will relatively force Indian buyers to settle for domestic material.
  
  

Short-term outlook
If buyers succumb to their fear of future price increase and start booking material in bulk, there may be a supply shortage and inflation in the near future.