China: Chrome Ore Spot Prices rises in line with Chinese Yuan Depreciation

The spot price of mainstream chrome lumpy increased by USD 0.14/MT this week, due to the impact of the RMB depreciation against the US dollar. Hence, the spot price of chrome ore increased, and alloy plant found the price of spot ore even firmer with low-cost resources hard to be sourced, which made them have to accept the mainstream transaction price on the market. Impacted by the exchange rate change, the inquiry on future goods are sluggish and many traders have expressed that they will wait for the rate to settle down before resuming their procurement. Mainstream ore producing countries take firm ground on price despite the scarce futures inquiries.

Sellers stand firm to prop up the price given the fact that the mainstream lumpy inventory at the port, particularly high grade, are at a low level and seller are therefore under no pressure of inventory. Though the purchasing passion by alloy plants is still low, they are aware that mainstream lumpy ore is still indispensable for feed blending and procurement is just postponed. Ore sellers will opt to back up the price if there is no capital strain.

At present, as the suppliers of future cargo are willing to keep price firm, spot goods at Chinese ports will naturally size the opportunity to maintain a strong edge as most of them are still at loss. However, in the Ferro Chrome market, the trading situation in general, and the retail price find it hard to increase, and the ferrochrome plant still needs to strictly control the cost. In the short term, although the inquiry on port chrome ore improved, the transaction is relatively deserted, and the market is slightly deadlocked.

Stainless Steel mill tenders:
Maanshan Steel announced its ferrochrome tender price for August, showing HC ferrochrome is set at RMB 6,900 (USD 980)/ 50 basis per MT, up RMB150 (USD21.30) compared with last month, with particle size required for 10-60mm in usual quantity. LC ferrochrome tender price is finalized at RMB11, 148 (USD1583)/ 60 basis per ton, up RMB348 (USD49)/60 basis per ton compared with last month with particle size required for 10-60mm, in usual quantity. The above prices are tax inclusive, acceptance and delivered to the factory.

Chrome Ore Futures Market:
First, regardless of the actual level of procurement willingness, suppliers from Turkey, Pakistan, etc. have all marked up chrome ore prices slightly. For example, 46-48% Turkish chrome concentrate (Cr: Feratio 2.4) is generally quoted at above USD230/MT (CIF), and with virtually no bargaining room left. The reason for such scenario is that the mining cost is high and the price has fallen through their cost Line, and they have no intention to sell at a loss, besides the recent domestic spot prices have gone up. Hence, Turkish suppliers are among the first to increase futures prices. The same is true for Turkish lumpy chrome. Though there are few inquiries, suppliers have no intention to sell at a lower price, regardless of the demand.

Also worth noting is the Albanian ore, of which the mainstream offer for 40-42% lumpy is around USD 230 /MT (CIF), showing the minimal adjustment on price since it has long been at high position and firm.