Indian ferro chrome smelters are now offering the material at around INR 107,000/tonne (t). However, most deals were recorded in the range of INR 105,500-106,500/t ex-Jajpur. An end-user in the domestic market also informed of a deal at an even lower price level, as the smelter is in dire need to sell its stock. Few smelters are also holding on to their stock in anticipation of price increases.
Prices are on a rising trend due to two major factors
- South African unrest:
Widespread violence and riots have triggered declarations of Force Majeure at ports in South Africa’s KwaZulu-Natal, in eastern South Africa. The affected regions contain two major ports for chrome and manganese shipments, Richard’s Bay and Durban. Transnet declared Force Majeure on 12 July from Durban and Richards Bay ports. Meanwhile, Bulk Connections notified their customers about the Force Majeure amidst the ongoing riots until further notice. “In the best interest of protecting our staff, assets, and client’s cargo; we will remain closed until such time as calm and order have been restored throughout the affected areas. This means our warehouses/operations in Johannesburg and Durban are not operational and all forms of transport remain suspended until deemed safe to operate,” stated C. Steinweg Bridge in their national unrest update.
Due to the nationwide unrest, it is expected that the chrome ore and ferro chrome shipments would definitely be affected for the month. Major chrome ore exporters remain anxious about dispatching ore from mines to ports, as they face serious logistical issues. Meanwhile, South African miners have stated that a new quotation of prices will only be possible after the situation stabilises.
This has had a severe effect on the Chinese chrome market, as the prices of South African ferro chrome in the Chinese spot market increased significantly by 18 cents/lb to around cents 112-117/lb and the UG2 prices increased by $5/t to $165/t CNF China. Meanwhile, Indian smelters are receiving higher inquiries from the Chinese market, whilst they are holding offers in anticipation of a sharp increase in prices from China. - Chinese ferro chrome prices increase in the domestic market:
Prices of ferro chrome in the Chinese market increased by around RMB 100/t amidst ongoing energy curtailment issues in Inner Mongolia. Although production in other provinces has increased, reduction in the quantity from Inner Mongolia has impacted the market because its production cost is lower compared to the other regions.
Meanwhile, demand from the 300 series stainless steel market is higher in China. The stainless-steel prices increased by RMB 200/t to RMB 17,600/t ($2,724/t) for Stainless HRC 304, 6mm, exw.
Outlook
Indian smelters could raise offers further after the news of South African riots, and increase in inquiries from China. Meanwhile, in China, sentiments are further strengthened by the increase in chrome ore prices from South Africa and robust demand from the stainless steel industry.
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