India: Ferro chrome prices fall in line with Chinese stainless steel tenders

In India, ferro chrome prices are on a decline due to limited demand from the exports and domestic markets. Sentiments have dampened after the Chinese stainless-steel mills’ tenders declared lower purchase prices for December 2022.

According to SteelMint’s assessment on 1 December, producers’ offers were hovering at around INR 96,500/t exw-Jajpur. Meanwhile, some producers offered at prices even lower amid selling pressure.

Factors dampening ferro chrome prices:

• Weak domestic demand: Indian buyers were delaying purchases because they expected further price drops following Vedanta’s auction on December 1. Furthermore, Tsingshan, a leading stainless-steel producer in China, reduced its ferro chrome tender prices for December 2022 by RMB 300/t ($110/t) m-o-m to RMB 8,195/t ($1,143/t). Domestic buyers were also encouraged to book their material at lower prices as a result of this.
• Slow buying from export market: Due to production cuts caused by the spread of Covid cases, China’s ferro chrome demand was deafeningly quiet. Meanwhile, Indian producers were attempting to sell material at 92-93 cents per pound CNF, but no deals were struck. Furthermore, despite a reduction in sea freight, producers were unable to conclude bulk deals from the European and US markets due to slow buying. According to reliable sources, producers were offering to Europe and the United States at around 96 cents/pound and 100 cents/pound on CNF basis. Furthermore, as a result of the global recession, most of the major buyers are taking a back seat and delaying their procurement plans. This had an effect on ferro chrome prices as well.
• Oversupply in market: Sellers were under pressure due to low demand and surplus inventory. In addition, some new players have restarted production. As a result of the oversupply, producers were forced to reduce their prices in order to attract new customers.

Outlook
The Indian ferro chrome market is expected to remain bearish, with buyers indicating a desire to buy at lower prices. In addition, participants are waiting to see how much prices can decline so that they can bid lower.