The Indian ferro chrome market is witnessing a downtrend as prices have been falling continuously since the past two weeks owing to low domestic demand.
The overall sentiment for ferro chrome is bearish and buyers, expecting a further fall in prices, are actively negotiating for lower prices. SteelMint assessed 2,200 tonnes of deals in the range of INR 112,000-115,000/t ex-Jajpur, while most of the offers are ranging in between INR 113,000-115,000/t ex-Jajpur.
Chinese demand down
Indian exporters informed SteelMint that the Chinese buyers are refraining from paying more than 118 cents/lb for HC 60%, CNF China, as they are expecting the prices to go down owing to bearish market sentiments. Increased ferro chrome production in China has also eased the availability in the domestic market, curbing the buying interest of the stainless-steel mills. Most of the stainless-steel mills are refraining from imports as prices in the spot market are down to RMB 9,800-9,900/t ($1,518-1,534/t) after the tender prices by major stainless-steel mills were reduced for September deliveries. Meanwhile, in addition to improved production in China, more usage of stainless-steel scrap has also led to the lower demand of ferro chrome in the country.
However, the power supply situation still remains poor. There is sufficient hydropower in the south, and output has increased, but the power curtailment policy in the north is still tight.
Stainless 201 series downtrend in Indian market
The stainless-steel futures on the Shanghai Futures Exchange (SHFE) rose on Tuesday, amidst increased nickel prices. However, this did not reflect in the Indian 200 series stainless steel (SS) market, as the SS producers are under selling pressure. The SS200 series is mostly used for manufacturing utensils and the market has been down since last year post-lockdown. Currently, with the increased raw material prices, production cost is not much viable, said an SS manufacturer.
Indian chrome ore prices increase by 8%
State-owned miner OMC concluded chrome ore auctions on 31 Aug’21, which received poor response due to the higher base price of chrome ore. As domestic ferro chrome prices are falling, there is anticipation in the market that the miner may decrease the prices of chrome ore. Thus, the auction did not get good response on higher prices.
Meanwhile, Tata Steel will also offer chrome ore in the domestic market, as per market sources. This might ease the availability of ore, further lowering the buyers’ interest in the auction.
Outlook
Market participants believe that the prices may fall further on low buying interest and sellers will have no outlet for supplies. Meanwhile, some traders feel that the power supply situation will play a crucial role in future pricing.
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