- Need-based buying continues despite lower prices
- Chrome ore tags fall, bringing down production costs
CBC: Ferro chrome prices inched down amid cautious demand, while supply constraints offered support. The recovery in output from the northern region was offset by strict production curbs in the south, while furnace restarts in Shaanxi led to heightened regional competition. Stainless mills maintained lean inventories and flat bids, as quiet discounts weakened confidence in the ore market.
High-carbon ferro chrome prices inched down by RMB 100/t ($14/t) w-o-w to RMB 7,640-8,050/t ($1,063 – $1,120 /t) exw, including taxes.
Meanwhile, medium-carbon ferro chrome prices dropped marginally by RMB 100/t ($14/t) w-o-w to RMB 12,500-12,700/t ($1,739-1,767/t) exw, including taxes.
Market recap
Chrome ore market sees mixed trends: Chrome ore prices fell w-o-w, amid increasing inventories. This brought down raw material costs for ferro chrome producers.
However, although spot prices softened, South African chrome ore concentrate futures at Tianjin Port remained stable. This reflects a divergence between internal and external market dynamics. Additionally, improved shipping efficiency also increased Turkish ore supply.
As such, downstream ferro chrome plants were less willing to accept high-priced material. As a result, miner sentiment was at odds with sluggish demand, creating a tug of war in pricing.
Declining margins prompt production cuts: Despite increased input costs, sellers were compelled to reduce prices due to lack of acceptance towards higher offers. To cope with the losses, some plants reduced supply by keeping their equipment under maintenance for a longer time.
However, production volumes in the northern region strengthened.
End-user demand slows down: The trend of production cuts in the stainless steel industry continued to intensify. Although the latest high-carbon ferro chrome bidding prices from a major steel mill in East China remained flat m-o-m, the reduced procurement volume signalled a decline in demand.
Additionally, in the retail ferro chrome market, the on-demand procurement approach continued to dominate. An increasing number of traders in North China quietly reduced their shipment prices, but actual transaction activity was subdued.
In China, heavy rainfall also dampened demand for construction steel, placing additional pressure on end-user stainless steel consumption.
Outlook
In the near term, ferro chrome prices are likely to remain weak amid easing costs and rising South African supply of chrome ore, while sluggish stainless demand persists. Demand from the new energy sector may offer some support.
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