India: Ferro chrome prices inch up as domestic demand improves

India’s ferro chrome prices inched up w-o-w owing to an improvement in domestic demand.

According to SteelMint’s assessment on 15 September 2022, most of the major producers concluded deals of around 3,000t at around INR 93,000-94,500/t exw. However, some small deals of around 1,000t were also concluded, at INR 92,000 – 93,000/t exw. The prices varied, depending upon the size, quantity and payments terms.

Factors supporting ferro chrome prices:

• Domestic demand improves: Domestic buyers began booking material after observing that prices had reached rock bottom and were unlikely to fall any further. This prompted sellers to increase their bids.
• Material shortage: Major smelters are busy catering to long-term export contracts and not willing to sell material below INR 94,000/t while small smelters have exhausted their material. This led to a material crunch in the market.
  One major buyer explained, “Many producers held their offers in anticipation of further increase in the domestic market. This week, some producers even refused to accept bulk orders.”
• UG2 chrome ore prices inch up: Due to increased market demand and rising ferro chrome prices in China, UG2 chrome ore concentrate suppliers are optimistic about the market. Chrome ore offers in China and other countries continued to rise. Fuelled by the price increase in future deliverable cargo from South Africa, spot traders in China were also willing to prop up prices and hesitant to conclude deals at previously accepted prices. This boosted ferro chrome prices as production cost increased.

China market overview
China’s ferro chrome (HC60%) prices rose slightly, by RMB 200/t ($29/t) to RMB 7,950/t ($1,137 /t) exw-Inner Mongolia, due to improved demand. Market confidence has increased, although transaction prices have improved only slightly. However, some leading plants in northern China were not in a hurry to step in because of the rising costs of future deliverable cargo. They partially accepted higher alloy prices.

Outlook
Because of improved demand and the hike in imported chrome ore prices, market participants have a positive attitude towards prices in the coming week.

However, a price fall from the current levels will not be viable. “Producers will have difficulty in sustaining at the current prices for long. If prices fall sharply from here, then they may have to cease selling due to high production costs,” a major producers explained.