On one hand, the continuous price increase of HC Ferro Chrome has a supportive influence on chrome ore; and on the other hand, ongoing environment policy has resulted in lower operational rate amongst Ferro Chrome mills in China and consequently chrome ore demand is suppressed. In the meanwhile, stock level at Chinese ports is going down and new deliveries are not as intense as before, but thin demand makes it still run at high levels (approx 3 MnT). Given the mixed positive and negative factors, some aggressive traders keep driving up prices but some participants holding gloomy outlook are more discreet in their transactions.
South African UG2 Chrome Ore prices tracked alloy prices higher to around USD 215/MT, on the back of South African miners trying to push up prices.
Following Central Government’s environment supervision team stationed in some provinces in China, pollution control factor has been increasingly weighing on HC Ferro Chrome production. Production affected in inner-Mongolia (major Ferro Chrome producing province of China) itself has reached more than 60,000 MT and given that this round of inspection will last for more than one month, the onward HC Ferro Chrome prices will gain sufficient support. Currently, major Stainless steel mills in China are having to pay higher than their set tender price for the month to secure sufficient Ferro Chrome in the spot market.
On the future outlook, there is limited downward pressure on Chrome Ore prices, despite demand being fairly lackluster.
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