Indian producers raise offers in line with rising Ferro Chrome prices in China on the back of higher July Tender price by Chinese Stainless Steel mills.
Environmental concerns triggered production cuts in China which propelled Ferro Chrome prices and, resultantly, the prices of the commodity reflect a northward movement in the Indian market despite moderate demand.
SteelMint assessed Ferro Chrome prices at INR 84,000-85,000/MT (ex-Odisha).
Chinese Ferro Chrome producers have slashed production significantly in order to comply with pollution-curbing norms and despite moderate demand, prices have soared due to supply crunch.
Earlier, major Chinese stainless steel mills of the likes of Baosteel, Tisco, and Tsingshan had raised their tender prices to around 7,800 Yuan, up by 700 Yuan compared to June prices, but spot deals are being reportedly struck above that slab.
Reliant on Ferro Chrome imports, Chinese buyers have had to withstand blows as a result of the RMB depreciating against the USD, thereby making imports costly. While Indian producers are offering at 95 cents/lb and above, counter offers are at 93 cents/lb CIF China.
Moreover, UG2 chrome ore supply from South Africa has slumped due to the winter season, with producers preferring to cut production rather than lose margins owing to high electricity costs.
Demand from Japan, however, is healthy as the country is utilizing its stainless steel production capacity to the brim. Offers to Japan are assessed at 98 cents/lb CIF Japan while trade with South Korea is thin, with offers being made at 96 cents/lb CIF Korea.
Moving ahead, market participants are expecting Ferro Chrome prices to spiral further due to the prevailing supply restrictions.
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