Bhutan ferrosilicon prices up
2015-05-06 09:51:03 [Print]
BEIJING (Asian Metal) 6 May 15 - Having reached what many had concluded to be bottom-out level in the past week at INR63,000/t (USD989/t) ex works due to weak demand and stockpiles of material at around 5,000t in the past two months, Bhutan-origin ferrosilicon 70-72%min market is slowly climbing up as Indian buyers have confirmed higher prices this week at INR64,000-65,000/t (USD1,005-1,020/t) ex works.
At close, current nominal price increase of INR1,000/t (USD15.7/t) ex works or 1.58% from INR63,000-64,000/t (USD989-1,005/t) ex works in the past week now to INR64,000-65,000/t (USD1,005-1,020/t) ex works only yielded USD8.00/t in real price increase due to about 0.79% depreciation in Indian Rupee (INR) in the past 8 days and this, many traders fear, will continue and thereby likely to see Bhutan-origin ferrosilicon 70-72%min price rise another 2-3%, more so producers are believed to be currently operating at losses.
An end-user in Kolkata confirmed buying 20t-worth of ferrosilicon 70-72%min from Bhutan Tuesday and stated this was the best offer the company received. “The market is a bit firmer essentially on the need by producers to recover production cost rather than strong demand,” remarked the source expecting the material to be released in the next two days and had arranged to transport the cargo to Kolkata at a cost of INR1,700/t (USD26.7/t).
In Gujarat, a trader also confirmed unsuccessful bid at buying Bhutan-origin ferrosilicon 70-72%min at INR63,500/t (USD997/t) ex works and instead bought 80t-worth of material at INR64,000-64,500/t (USD1,005-1,013/t) ex works. According to the source the concluded deal is to be released and sold to regular end-users with 30-day payment term at INR69,000-70,000/t (USD1,083-1,099/t) ex warehouse, which is INR1,000/t (USD15.7/t) ex warehouse higher than retail deals concluded in the past week. The source defended shifting the price increase to consumers, declaring, “Any market or deal price is guided and governed by landing cost and we do spend up to INR3,700/t (USD58.0/t) on transport and logistics with about INR800-1,800/t (USD12.6-28.3/t) left as margins and dependent upon 11-17% interest paid on credit extended to us by banks.”
And on the future trend, participants think there is enough room for Bhutan-based producers to raise asking price further because their Indian counterparts’ cost-curve to remain competitive, especially the new ones that have recently commenced operations are burdened with high interest on loans, is around INR70,000/t (USD1,099/t) ex works; thus Bhutan-based producers could raise price to INR68,000-69,000/t) (USD1,068-1,083/t) ex works.
Exchange rate: INR63.7:$1
At close, current nominal price increase of INR1,000/t (USD15.7/t) ex works or 1.58% from INR63,000-64,000/t (USD989-1,005/t) ex works in the past week now to INR64,000-65,000/t (USD1,005-1,020/t) ex works only yielded USD8.00/t in real price increase due to about 0.79% depreciation in Indian Rupee (INR) in the past 8 days and this, many traders fear, will continue and thereby likely to see Bhutan-origin ferrosilicon 70-72%min price rise another 2-3%, more so producers are believed to be currently operating at losses.
An end-user in Kolkata confirmed buying 20t-worth of ferrosilicon 70-72%min from Bhutan Tuesday and stated this was the best offer the company received. “The market is a bit firmer essentially on the need by producers to recover production cost rather than strong demand,” remarked the source expecting the material to be released in the next two days and had arranged to transport the cargo to Kolkata at a cost of INR1,700/t (USD26.7/t).
In Gujarat, a trader also confirmed unsuccessful bid at buying Bhutan-origin ferrosilicon 70-72%min at INR63,500/t (USD997/t) ex works and instead bought 80t-worth of material at INR64,000-64,500/t (USD1,005-1,013/t) ex works. According to the source the concluded deal is to be released and sold to regular end-users with 30-day payment term at INR69,000-70,000/t (USD1,083-1,099/t) ex warehouse, which is INR1,000/t (USD15.7/t) ex warehouse higher than retail deals concluded in the past week. The source defended shifting the price increase to consumers, declaring, “Any market or deal price is guided and governed by landing cost and we do spend up to INR3,700/t (USD58.0/t) on transport and logistics with about INR800-1,800/t (USD12.6-28.3/t) left as margins and dependent upon 11-17% interest paid on credit extended to us by banks.”
And on the future trend, participants think there is enough room for Bhutan-based producers to raise asking price further because their Indian counterparts’ cost-curve to remain competitive, especially the new ones that have recently commenced operations are burdened with high interest on loans, is around INR70,000/t (USD1,099/t) ex works; thus Bhutan-based producers could raise price to INR68,000-69,000/t) (USD1,068-1,083/t) ex works.
Exchange rate: INR63.7:$1
Ferro-silicon 72%min Ex-VAT FOB China
Unit:USD/mt
China's ferrosilicon producers' suspension number statistics by province by month
Unit: pcs
