Ferrosilicon follow-up international market trends
- shape: Lump, granule
- size:Customizable
- colour:silver
- Application:Steelmaking
- Place of Origin:Henan,China
- Brand Name:Wenhao
Weak domestic demand for downstream steel is weighing on spot prices of ferrosilicon in India, prompting producers to reduce output, while ferrosilicon was already under pressure due
to rising electricity prices.
On November 26, Argus assessed the ex-factory price of 70# ferrosilicon at about 107,000-109,000 rupees/ton. The ex-factory price fell by about 1,000 rupees/ton that day. Current
domestic ex-works prices
fluctuate at Rs 107,000-108,000/ton, down from Rs 109,000-110,000/ton on November 12, when prices started a downward trend due to weak domestic demand.
A slowdown in steel industry purchases is putting more pressure on near-term prices for ferrosilicon, which is already suffering from
weak global demand. With no signs of recovery in inquiries and production costs, the trend is likely to continue in the short term, putting pressure on Indian producers, sources said.
Ferrosilicon is used as an
additive to increase the hardness and strength of finished steel.
Producers said limited construction activity, cold weather and poor infrastructure in Meghalaya, India's main coal-producing state,
also affected output.
Sources said that after the production cut, Meghalaya's ferrosilicon production is now around 4,000-5,000 tonnes/month, compared
with 5,000-6,000 tonnes/month before the power tariff hike was announced.
Data from the World Steel Association (WSA) showed that India's crude steel production in October was 12.5 million tons, a year-on-year
increase of 1.7%.
A possible increase in ferrosilicon prices in Bhutan, India's main supplier, may also increase pressure on alloy demand.
According to Indian market participants, Bhutan has a ferrosilicon production capacity of 15,000 to 16,000 tonnes per month, and the country has been
grappling with power shortages due to reduced water and electricity supplies due
to low water levels. If Bhutan imports electricity from India, its production costs will rise, which may lead to a further increase of 2,000 rupees per ton in ex-factory
prices to 109,000 to 111,000 rupees per ton. This will also reduce the competitiveness of Bhutanese ferrosilicon in the Indian market, forcing Bhutanese ferrosilicon
producers to look for alternatives such as China, Indonesia, Malaysia and Hong Kong, they added.