Although, Ferro chrome prices in China are increasing, Stainless steel prices remain at the same level. Also, there is insufficient demand in the Indian domestic market to suggest any improvement in the near-term.
Indian producers are hopeful that demand from China will increase on the backdrop of rising prices in China. But, demand from the domestic Stainless steel mills in India is very low, as there has been a surge in Stainless steel imports from China at very low rates. As a result, Indian Stainless steel industry’s capacity utilization is just over 50%. Indian Ferro chrome producers need the domestic market share as it accounts for almost half their sales.
Deeply affected by surge in imports from China, the Delhi Stainless Steel Trade Association has written a letter to PMO requesting the Hon’ble Prime Minister Narendra Modi to abolish customs duty on raw material like Nickel and Melting Scraps and to increase custom duty on finished Stainless steel to 15%. SteelMint assessed that this would not only safeguardinterest of the domestic Stainless steel industry but also provide a big boost to Ferro chrome industry in India, which has been plagued by very weak demand of late. Currently, Ferro chrome (grade 60%) is being offered at around INR 69,500/MT (ex-works Odisha) and INR 70,000/MT (ex-Raigarh).
Also, a deal was heard to be concluded at 88-89 cents/lb CIF Japan for early December delivery for small quantities. Currently, Japan is a better market than China for the Indian producers.
Earlier, China’s major stainless steelmakers raised its December purchase price by RMB 50/MT M-o-M late last week.
Following suit, Chinese Ferro chrome suppliers have also lifted domestic spot offers by RMB 50/MT. Domestic spot prices of 50% Cr Chinese HC Ferro chrome rose to RMB 6,300-6,450/MT (equivalent to 78-79.5 cents/lb) in line with higher December bids set by major steelmakers.
This is the first increase in spot prices in China in almost a year and a half. Prices had been falling since July last year amid rising Ferro chrome production capacity and weak demand from the Stainless steel industry.
Exchange Rate: USD 1= INR 62.10
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