China’s Baosteel, one of the major players in the global stainless steel industry, has reduced the purchase price of high carbon ferro chrome by a mammoth 2750 Yuan M-o-M to set it at 7,100 Yuan (USD 1028.5) per tonne for May’17. Similarly, Taiyuan Iron & Steel (Tisco) has also lowered its purchase price for high carbon ferro chrome at 6,900 yuan (USD 999.3) per tonne for May, 2,700 yuan lower than its April tender price.
The fall in purchase price comes after a significant fall of USD 100/MT in chrome ore prices. Moreover, this sharp fall can also be attributed to the weak Stainless Steel market in China.
Most market sources are of the view, that the primary reason for the reduction in purchase prices of ferro chrome is that most mills plan to undergo maintenance during May, thereby requirement to procure Ferro Chrome is much lower. Furthermore, other major steel mills like Tsingshan Steel will not declare purchase price for May’17, as it has sufficient stock and is also likely to undergo maintenance.
SteelMint assessed that this sharp fall in purchase price is indicative of the fact that Ferro Chrome demand from China’s Stainless Steel sector is down drastically and is likely to push Chrome Ore prices further down. This will in-turn pressure global Ferro chrome offers to correct significantly.
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