Indian Ferro Chrome market is wary of the present market scenario as the producers have been struggling for better deals. Prices have been falling aggressively and the market remains pessimistic. Presently, the purchase prices are much lower than the production cost; this has put a few small manufacturers under tremendous pressure. Many Ferro Chrome plants are preparing for production cuts and maintenance shutdowns as production under such conditions is not viable.
In the first week of December, the prices in the domestic market fell further by INR 1000/MT to INR 61,000/MT Ex-Jajpur. Meanwhile, few deals were heard to be concluded at marginally higher prices. In the export market, the prices were affected abruptly after the tender prices of Chinese Stainless steel mills were released. Bao Steel and Tsingshan released their purchase prices of HC Ferro Chrome for December, which is down by RMB 400/MT for each.
Producers shared with SteelMint, “the prices of Chrome Ore are still on the higher side, and it is mainly because the manufacturers were low in inventory for the higher grade ores and thus, the OMC auctions received such a high response”. “Although the prices were lower as compared to the previous month, yet it is not viable to continue the production. We may need to cut our production by next week”, he added.
Another producer said that there is a very thin chance that the market may improve anytime soon, as the winters are approaching. Therefore, any improvement in the market can only be expected after the mid of January. Indian manufacturers can feel the intensified pressure, but most of them are not willing to sell below INR 61,000/MT. However, cash crush in the market is one of the big issues and therefore, the negotiation levels are also aggressive.
On the future outlook, prices may decrease marginally as there is not much scope of further correction in prices in the current scenario. The market is overall pessimistic and remains buyer-oriented.
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