Ferro Chrome prices took a hit as production resumed in the Inner Mongolian province of China.
Buyers breathed a sigh of relief after weeks of surging Ferro Chrome prices. The resumption of production would, in turn, put selling pressure on producers.
“With the rise in production levels, buyers have taken a cautious stance, keenly observing the drifting prices of the commodity,” said a source, referring to low buying interest.
Another source pointed to two significant reasons for plunging Ferro Chrome prices: first, the depreciating Yuan vis-à-vis the USD and second, the ongoing trade war between the US and China, which has affected stainless steel demand in the latter country.
SteelMint has come to learn that Chinese buyers are preferring domestically produced Ferro Chrome rather than imports from India. Despite Indian producers reducing their offers to 91 cents/lb CIF China, counter-offers from buyers are low.
Demand from Japan and South Korea remains moderate notwithstanding the fact that offers to the two Asian countries have been reduced to 96 cents/lb CIF Japan and 95 cents/lb CIF Korea respectively.
Taking a leaf out of Chinese buyers, Indian purchasers have put a tight leash on buying, forcing producers to lower their offers.
“Although the chrome ore auction held by OMC has received a positive response, prices were much lower than expected,” said a source, referring to non-supportive ore prices.
SteelMint assessed Ferro Chrome prices at INR 82,000/MT (ex-Odisha). However, some deals have been concluded above that level.
On the futures front, market participants are uncertain about price movements, while they hope prices to hold at current levels.
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