Indian ferrochrome prices increased by INR 4,000/t w-o-w. Currently, the prices are at INR 70,000/t in the domestic market, while a few producers are also quoting higher after concluding deals.
There are multiple factors behind this spurt in prices:
- Ferrochrome prices shot up after continuous decline owing to supply shortages. Since most of the producers were low on the chrome ore inventory, the production levels of ferrochrome decreased and the supplies were adversely affected.
- Stainless steel prices for 200 series have increased significantly, making it a bull market and providing ferrochrome producers an opportunity to hike prices.
- European benchmark by Merafe Resources increased by 3.1pc q-o-q to cents 117/lb after being unchanged for three consecutive months. This provided confidence to the Indian producers to increase their prices in the exports market as well.
- UG2 chrome ore prices have increased in the week, boosting the ferrochrome prices in China and worldwide.
- Chinese production of ferrochrome was badly affected due to power cuts and higher electricity tariffs, this also inclined with the increased prices for Met coke, adversely affecting the cost of production. With Yuan appreciating against US Dollars, Chinese buyers are more motivated towards importing ferrochrome.
- Inquiries from China increased and this boosted the sentiments of the Indian exporters who are quoting higher prices.
Current Assessments:
- Ex-Jajpur: INR 70,000/t;
- Ex-Durgapur: INR 71,000/t;
- CNF China: cents 70/lb;
- CNF South Korea: cents 72/lb; and
- CNF Japan: cents 73/lb
Outlook:
With increasing inquiries from China, Ferrochrome prices are expected to further increase in the coming weeks. Meanwhile, with the new strain of the virus in South Africa, there are chances that the exports from South Africa might get affected and the prices in India might benefit from it.
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