India: Ferro chrome prices tumble w-o-w as demand remains lackluster

Indian domestic ferro chrome prices slumped by INR 3,500/t w-o-w amid sluggish demand as buyers were waiting for Vedanta’s ferro chrome auction.

According to SteelMin’s assessment on 4 August 2022, most producers were offering HC60% grade at INR 96,000-97,500/t exw-Jajpur. However, bids were heard at INR 94,000-96,000/t exw-Jajpur. The disparity in bids and offers kept trade activities limited this week.

Factors keeping ferro chrome market sluggish-

• Buyers silent, await Vedanta auction: Domestic demand remained lackluster as buyers opted for a wait-and-watch mode as they were expecting prices to fall following Vedanta’s ferro chrome auction on 3 August. This led to most sellers trimming their offers to attract buying interest.
• Dull sentiments in China: Chinese stainless steel producers reduced their monthly ferro chrome purchase tender prices amid a bearish market. In addition, Chinese buyers were bidding at 88 cents/lb CNF China as they lost the confidence due to continuous slump in chrome ore and ferro chrome prices. Meanwhile, lower bids made it unviable for Indian producers to sell. Hence, they turned to the domestic market and lowered offers due to selling pressure. Thus, there was surplus supply in the market compared to demand.
• Imported chrome ore prices on downtrend: Imported prices for chrome ore continued the declining trend amid weak demand as alloy plants become highly cautious to make purchases. Thus, the decrease in chrome ore prices infuenced Indian buyers to book material at lower prices in the domestic market.

Positive stainless steel sentiments limit sharp price fall

On the other side, domestic stainless-steel prices rose this week as scrap prices increased amid supply shortage. Stainless steel prices were also supported by improved finished steel demand. Prices for 304 grade, HRC were assessed at INR 239,000/t ex-Mumbai on 2 August 2022, up by INR 1,000/t w-o-w. This capped any major drop in ferro chrome offers this week.

China’s market overview
China’s ferro chrome (HC60%) prices fell by RMB 700/t w-o-w to RMB 8,150/t exw-Inner Mongolia due to weak demand. Domestic spot stainless steel inventory in China was low, and downstream prices decreased last week. In addition, alloy plants are also curbing production in a bid to offset operating loss. As a result of price retreats, stainless steel producers adopted a policy of buying less and paying less.

Outlook
The Indian ferro chrome market is expected to remain bearish as weak demand is likely to continue in the coming weeks. However, Vedanta’s ferro chrome result will give a clear picture.