High Carbon Ferro Chrome market was mostly calm with a lack of active trading interest expressed by most participants.
Prices of HC Ferro Chrome remain static in the domestic market due to less demand and low availability of chrome ore in the Indian market. Currently 60% grade is being offered at around INR 68,500/MT (Ex-works Odisha) and INR 69,000/MT (Ex-Raigarh). The market is relatively calm for the past few months with participants describing spot trading activity as sporadic and slow. Market participants are anticipating that prices will rise if OMC Chrome Ore receives higher bids in the next e-auction.
OMC will conduct an e-auction for sale of 61,000 MT friable Chrome ore and 5,000 MT Chrome ore concentrate on 18 Jul, 2014. In the last OMC’s Chrome ore e-auction held on 18 Jun 2014, prices had increased across all grades. Total quantity on offer was 65,000 MT.
Japanese Market
The spot price of HC Ferro Chrome imported into Japan stayed flat at 90-92 cents/lb CIF Japan Friday, unchanged from last week despite signs of possible supply constraints. There was no deal, firm bid or offer reported from Japanese buyers or Indian seller sources. “We have increases in inquiries from Europe and the US, but none from Japan,” said one Indian producer source.
The market has entered a lull season, as Japanese stainless mills started to reduce run rate in July following the seasonal power rate rise over July-September, sources said. Some mills plan to close plants for several weeks for annual maintenance during the quarter.
Japanese mills also want to wait for the settlement of the third quarter South African charge chrome price negotiations between producer Xstrata and Japan’s largest stainless steel mill Nippon Steel & Sumikin Stainless, traders said. “The Q3 charge chrome price generally sets the trend, so people are waiting for that before making actions. The next buy move is expected in late July at the earliest,” said a trader from India.
SteelMint assessed that South African producers are likely to have asked for a hike on the back of higher power costs in South Africa, but the buyers may be resisting as there is no sign of Ferro Chrome prices in China rising and the Japanese and European mills compete with the Chinese mills in the global stainless steel market. An Indian producer said 90-92 cents/lb CIF Japan was a logical level for this week, but warned prices were likely to rise on the back of chrome ore feedstock tightness and increases in container freight cost from India to Japan.
He said freight was up by roughly 10% month on month. Ferro alloy shipping from India’s Vishakhapatnam and Kolkata ports suffered some delays of several weeks as well, due to crunch in container space availability especially those sailing directly to Nagoya. “We are handling by calling ships from other ports to Vishakhapatnam, or to take an alternative route, transiting at Singapore rather than making direct sales to final destinations,” said a second Indian producer source.
A South Korean market source said he heard price levels of Indian high-carbon Ferro Chrome to be around 90 cents/lb CIF Busan. Japanese import prices are typically 1 cent/lb higher than South Korean levels due to additional freight cost from India.
Chinese Market
Spot prices of India-origin HC Ferro Chrome (58-60% Cr) and South Africa-origin charge chrome (48-52% Cr) at 82-84 cents/lb CIF China and 81-82 cents/lb CIF China respectively, both flat week on week amid a dearth of offers and deals.
Most buyers’ price ideas for imports were below 80 cents/lb CIF, around 78-79 cents/lb CIF, though these were not firm bids, said sources. Sellers were also unwilling to drop prices to such levels, they added.
An Indian producer said the highest price his customers were willing to pay was 82 cents/lb CIF, but his lowest acceptable selling price was 86 cents/lb CIF given higher chrome ore prices. Supply in India was also tightening with producers cutting production due to chrome ore shortage, he added.
While the monthly purchase prices of steelmakers had fallen, domestic spot prices of 50% Cr Chinese high carbon Ferro chrome had held up at Yuan 6,400-6,600/MT (equivalent to 79-81 cents/lb). The price level has been unchanged for three straight weeks.
Exchange Rate: USD 1=INR 60
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