India: Ferro silicon prices plunge w-o-w amid weak pre-Diwali demand

Indian ferro silicon prices plunged by INR 3,600/t w-o-w with negligible trade seen last week, due to weak demand.

Ferro silicon (70% grade) prices stood at around INR 130,000-132,000/t in Guwahati on exw basis, according to SteelMint's assessment on 21 October 2022. On the other hand, Bhutanese producers held offers at around INR 133,000-135,000/t on exw Bhutan basis.

Market highlights
The market witnessed weak demand as the majority of buyers were booked till October as they had stocked up ahead of the upcoming festival (Diwali) and the remaining were planning to book material after the holidays as they are sufficiently stocked up.  As a result, this led to lower prices from Guwahati.

In addition, end-users' demand is limited at the current levels as buyers anticipated a further drop in ferro silicon prices. Meanwhile, buyers negotiated hard to book material at lower levels. This also forced smelters to reduce offers amid selling pressure.

On the contrary, the majority of the suppliers from Bhutan are sold out while the rest of them were offering higher than Guwahati’s offers, depending upon available stocks. Furthermore, Bhutan’s producers were not in a hurry to sell the material as they have enough bookings for the month. This protected ferro silicon prices from falling sharply.

China market overview
Chinese ferro silicon (75%) prices, meanwhile, increased marginally by RMB 50/t w-o-w to RMB 9,000/t exw-Inner Mongolia and exw-Quinghai as per SteelMint's assessment on 20 October. The market has seen more active buying after the Golden Week festival.

Ferro silicon futures on the Zhengzhou Commodity Exchange (ZCE) dropped by 7% or RMB 644/t ($89/t) w-o-w at RMB 7,988/t ($1,102/t) for November deliveries, as per SteelMint assessment on 21 October.

Outlook
Indian ferro silicon prices are expected to remain under pressure in the coming week. The exact picture of demand will be clear post-Diwali holidays.