India: Ferro silicon prices decline post Bhutan's June offer announcement

• Bhutan's offer decline by INR 7,000/t ($74/t) m-o-m
  
  
• Low inventories support Chinese market stability
  
  

Indian ferro silicon (Si:70%) prices witnessed a drop of INR 3,200/t ($34/t) w-o-w to INR 99,000/t ($1,041/t) exw-Guwahati. Prices dropped following Bhutan's offer declaration for this month at INR 99,000/t ($1,041/t) exw.

In Bhutan as well, prices fell by INR 3,000/t ($32/t) w-o-w to INR 99,000/t ($1,041/t) exw. Close to around 1,800 t of deals were concluded last week in Bhutan within the price bracket of INR 98,000-102,000/t ($1,031-1,073/t) exw.

Market recap (26 May 1 June)

Bhutan price drop reshapes market trends: India's ferro silicon market closely tracks pricing trends in Bhutan, which remains the key driver of prices in the Indian market. Monthly offers announced by Bhutanese producers are widely adopted by suppliers in Indias North-East region and often set the tone for domestic trade.

For June, Bhutan's ferro silicon prices were announced at INR 99,000/t ($1,041/t) exw, marking a sharp decline of INR 7,000/t ($74/t) m-o-m. The correction is largely attributed to subdued demand from end-user sectors, particularly stainless steel, where consumption has remained weak. In addition, recent capacity additions in Bhutan have intensified competition among producers, resulting in more aggressive selling strategies. Weak export demand has further added pressure, as material that would typically be shipped overseas is being redirected to domestic markets, increasing supply availability.

Following the announcement, trading activity remained limited during the week, especially in the North-East region, as buyers and sellers assessed the new pricing levels and awaited clearer market direction.

Steadiness in Chinese market: Ferro silicon (Si:75%) prices in China held steady w-o-w at RMB 6,150/t ($909/t) exw-Inner Mongolia. Firm semi-coke prices continued to support production costs, while differences in electricity tariffs across major producing regions resulted in varying production costs among manufacturers. On the supply side, some plants that had undergone maintenance gradually resumed operations, leading to a slight increase in market availability. However, low inventory levels helped prevent significant price declines.

Demand from the steel sector remained weak due to the seasonal slowdown, with steel mills mainly purchasing small quantities as needed. Demand from the magnesium sector stayed steady, offering some support to the market. Looking ahead, ferro silicon prices are expected to remain range-bound in the short term. Cost support from raw materials and stable power prices may help sustain prices, although weak steel demand and rising production could limit any substantial upside.

Decline in ZCE futures: Ferro silicon futures for August 2026 delivery on the Zhengzhou Commodity Exchange (ZCE) fell by RMB 222/t ($33/t) w-o-w to RMB 5,850/t ($865/t) on 1 June, compared with RMB 6,072/t ($898/t) on 25 May.