… However, industries are unsure if they can capitalise
Rajesh Rai | Phuentsholing
The ferrosilicon export price has hit a record price with a metric tonne (MT) earning as high as Nu 107,000 today. The lowest price for 1MT of ferrosilicon is Nu 102,000.
In November to December 2019, the ferrosilicon price was Nu 61,500 per MT. The price rose to Nu 89,000 when the border gates were first sealed on March 23 in response to the Covid-19 pandemic. Three months later it slumped to Nu 77,000 per MT between July and August 2020.
This is the highest export price recorded for the export commodity.
However, given the ferrosilicon industries’ manpower shortage today, industrialists are doubtful if they can really capitalize on the opportunity. There are eight ferrosilicon industries in Pasakha.
Shortage of manpower has hampered the finished goods processing and loading capacity.
“While the prices have gone up, the industries are unable to dispatch as expected because of the shortage of manpower,” an industrialist said.
Meanwhile, the ferrosilicon price has increased due to the increase in demand in the market. Steel mines in India were re-auctioned last year and the cost of everything, including the price of steel has since then shot up with more demand. The cost of raw materials has also increased.
At the same time, there is also an increase in the number of mega-projects in India, which then increases the demand for steel and creates more demand for ferrosilicon.
“Nothing is in our hand in the case of rate,” one manager in one of the industries said. “It is totally dependent on how the steel demand is in India. Many projects are coming up in India today.”
Industrialists, however, say this “high rate” will not last long as demand and supply will adjust eventually. “But the Bhutanese ferrosilicon industries have a phenomenal opportunity.”
For Pasakha industrial estate, the cost of semi-coke, a raw material, imported from China has increased due to the increase in the freight charges.
In November 2020, ferrosilicon industries paid about USD 243 to import one MT of semi-coke. This was an increase from USD 25-40 per MT before the pandemic and a few months after the pandemic in 2020.
Today, one MT of semi-coke has touched a whopping USD 240-280 per MT.
The industrialists attribute the increase in the freight charges to the shortage of containers in the market due to the pandemic. It is also because there are fewer ships operating.
In 2019, ferrosilicon was Bhutan’s number one exported commodity with export value of Nu 9.7 billions (B). However, it had drastically dropped compared to 2018 when the country exported Nu 13B worth of ferrosilicon.