With the strong correlation between Chrome Ore and Ferro Chrome, the Chinese Ferro Chrome plants are more willing to increase prices owing to the increase in chrome ore, sending the costs up. Some plants have already marked up the prices for now. However, the increased prices seemed to contradict the flat tender price announced by Tsingshan moreover, it is rumoured that stainless-steel mills would scale down production in the dampened market. For example, one mill in east China scaled down its daily output by 800-1000 MT, and maintenance will follow during Mar-Apr, which will take out 30,000 MT from the market in April. Data shows that the HC Ferro Chrome is being offered at RMB 5,600-5,700/MT. Affected by the spread of Covid-19 pandemic worldwide such as South Africa and India, the anticipated supply disruption has led to an across-the-board price increase on chrome ore; which is particularly true for the widely used South African Chrome Ore concentrates, as demonstrated by an RMB 2/dmtu upswing.
The Tsingshan’s April Ferro Chrome purchase price is announced at RMB 5,647/50 basis per MT, tax inclusive, delivered to the mill, down by RMB 150 for ex-Tianjin port delivery, and flat as compared to last month. The delivery date is before May 15, 2020;
The replenishing tender by HBIS for Mar on HC Ferro Chrome is set at RMB5,900/50 basis per ton, tax inclusive, delivered to mill, with purchasing amount of 500MT;
Dalian special steel confirmed its LC Ferro Chrome price for April tender at RMB10,400/60 basis per ton, acceptance, tax inclusive, delivered to the mill, with purchasing amount of 200MT.
Chrome Ore: Firm And Going Upward
Traders are optimistic about the future market as it reels over the lockdown in South Africa. However, more focus needs to be paid on whether high sited offers can be accepted amidst downstream purchasing sentiments and flat tender price for April.
Stainless Steel: Notable Decline
In the morning session, 316L hot rolled steel in Jiangsu’s Wuxi market showed a notable decline, down by RMB50-100/MT. It is believed that the 316L hot rolled steel by Tsingshan was RMB 18,000/MT yesterday, down RMB 100 from Mar 23; Offer by Dongte stainless steel is also down to RMB18,050/ton for 316L.
Future Outlook:
In the short term, the HC Ferro Chrome may remain stable. As for later development, more attention is needed to be placed on the dynamics between demand and supply as well as the price trend of chrome ore. Additionally, the operating rate of factories also plays an important role, given that the Chrome Ore prices are increasing while the stainless steel market slows, further squeezing profits of alloy factories.
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