Indian Ferrosilicon prices rise again on supply issues from Meghalaya

Indian ferrosilicon prices had taken a plunge last week when major Bhutanese producers reduced their offer levels to liquidate their stocks before the financial year-end. Meanwhile, this helped few Bhutanese producers to sell enough quantity in the domestic market and once the bookings were enough, prices went up again in Bhutan.

Meanwhile, ferrosilicon producers in Meghalaya are facing seven hours of power-outage on a daily basis since last week and the smelters with no captive power were hit hard. These smelters are facing up to 50% of production losses as the seven-hour load shedding virtually affects nine working hours.

Current Prices in Bhutan are at INR 98,000/t in Bhutan, while, few producers are also offering higher prices. Meanwhile, Guwahati producers are offering at around INR 100,000/t, with a few deals at around INR 99,000/t Ex-works.

Meghalaya producers' firm at their offers

Although, Bhutanese producers are offering at INR 98,000/t ex-plant, Meghalaya producers are offering higher amidst supply issues. In addition to the power outage issues, many producers in Meghalaya await the upcoming tenders for ferrosilicon by a major government steel company. Meanwhile, few producers remain sold up to the first week of April and are dispatching previous orders.

"Power-outage has limited the production to 50% of the total output. Though the power is cut for seven hours, to generate the heat again in the furnace, it takes an additional two hours and is affecting around nine hours of production straight.", shared a Meghalaya based producer.

Export demand is the driving force in ferrosilicon market

Bhutanese producers have bagged a good number of orders for exports to Europe, where the demand still remains high due to low supply in the global market. Current transactional prices for exports are at $1,550-1,600 CFR in Europe. Meanwhile, many deals have been finalized by Bhutanese producers at $1,450/t fob India.

"We have booked good quantity in exports and the demand from the domestic market is also coming up now. This might keep the prices stable at these levels as a further price hike is less likely due to slowing steel prices.", stated a producer of ferrosilicon.

Outlook
Producers believe that these prices might sustain due to increased supply constraints. Meanwhile, traders believe that the demand for exports is expected to dent in the coming weeks.