Falling Ferro Chrome prices in China amid ample domestic supply and lower lower December stainless steel mill tender prices weighed on the market.
Indian Ferro Chrome producers highlighted that there is no real demand coming in from China and that their offers are just being put to test.
Earlier, major stainless steelmakers like Baosteel and Tsingshan lowered their December purchase prices by 800 Yuan M-o-M. As a result, Chinese buyers are only amenable to prices lower than 80 cents/lb CIF.
The fall in purchase price comes with no surprise as Ferro Chrome demand from China has been on a continuous downtrend from October. Moreover, this sharp fall can also be attributed to the weak Stainless Steel market in China.
Most market sources are of the view, that the primary reason for the reduction in purchase prices of ferro chrome is that there is ample domestic supply of Ferro Chrome in China, thereby requirement to procure Ferro Chrome is much lower. Moreover, strict environmental norms have resulted in output cuts among some stainless steel producers, reducing demand for Ferro chrome.
Ferro chrome prices are also under pressure from falling chrome ore prices in China. Chrome ore prices in the Chinese spot market have been on a continuous downtrend and South African 40-42% chrome ore was heard trading this week at USD 165/MT CIF China. Many attributed this sharp price fall to the weak Chinese Stainless Steel market and low demand for Ferro chrome further pressurizing Chrome Ore prices.
Indian offers are assessed at 80 cents/lb CNF China but counter-offers from the buyers are much lower. SteelMint assessed that other overseas markets have also pulled out and are in a wait-and-watch mode, for any deal between India and China to conclude. In line with the same, offers in Japan and Korea went down to 86 cents/lb and 85 cents/lb CIF respectively, as they are closely following the Chinese market.
Domestic market also reflected a similarity to the Chinese market as offers in India has corrected downwards to INR 70,000/MT (Ex-Odisha).
The domestic Ferro chrome market has trended down on very low volume deals concluded in the export market, as selling pressure grows on Ferro chrome producers, having more material to sell in the domestic market.
SteelMint learned that most market participants hold a pessimistic outlook towards the future market trend.
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