Higher Bhutanese output, tepid demand pull down Indian ferro silicon prices

• 5 new plants commissioned in Bhutan, all operating at full capacity
  
  
• Export supplies diverted to domestic market amid weak demand
  
  

Indian ferro silicon (Si:70%) prices dropped by INR 1,200/tonne (t) ($13/t) w-o-w to INR 97,800/t ($1,023/t) exw-Guwahati, as per BigMints assessment on 8 June. Prices in Bhutan also declined by INR 1,300/t ($14/t) w-o-w to INR 97,700/t ($1,022/t) exw.

Limited deals for around 600 t were heard last week across both regions within the price bracket of INR 98.000-99,000/t ($1,025-1,036/t) exw. Prices fell as inquiries remained slow, and buyers delayed purchases, expecting further price drops. Material availability was also heard to be sufficient, with more inflows from Bhutan.

Market summary (2-8 June)

Rising Bhutan output weighs on prices: India's ferro silicon market remained under significant pressure as increased production from Bhutan weighed heavily on prices. Bhutan ramped up output to around 26,000 t per month, compared with nearly 15,000 t earlier, following the commissioning of five new plants operating at near full capacity. The additional volumes boosted supply in the Indian market, compelling domestic sellers to reduce offers to remain competitive.

Meanwhile, the export market also remained weak, with prices declining sharply by around $70/t w-o-w to $1,140/t FOB Kolkata, amid reduced overseas buying interest. As export opportunities diminished, more material was redirected to the domestic market, further increasing supply and intensifying downward price pressure. The persistent decline in prices also kept buyers cautious, with most consumers avoiding bulk bookings and preferring need-based purchases in anticipation of further corrections, resulting in subdued trading activity across the market.

Chinese prices remain steady: Ferro silicon (Si:75%) prices in China held steady w-o-w at RMB 6,150/t ($907/t) exw-Inner Mongolia. Firm semi-coke prices and low inventories at major producing regions continued to support the market, as producers were reluctant to reduce offers. However, demand from steel mills remained weak, with buyers making only small, need-based purchases. Falling futures prices also added uncertainty and kept market sentiment cautious.

In the short term, ferro silicon prices are expected to remain largely stable. While production restarts and new capacity may increase supply, cost support and low inventories could limit further declines. Upcoming steel mill tenders and production trends are also expected to provide clearer price direction.

Ferro silicon futures for August 2026 delivery on the Zhengzhou Commodity Exchange (ZCE) were also largely stable, falling marginally by RMB 14/t ($2/t) w-o-w to RMB 5,836/t ($860/t) on 8 June, compared with RMB 5,850/t ($862/t) on 1 June.

Outlook

BigMint expects ferro silicon prices to soften further in the coming week as ample Bhutan supplies and weak demand continue to weigh on the market. Additionally, steel prices are yet to gain momentum; hence, weaker steel realisations may keep ferro silicon prices under pressure.