China: Ferro chrome prices edge up w-o-w on strong ore prices

• Chromium ore prices firm amid tight supply
• Stainless steel demand weak amid cautious buying

High-carbon ferro chrome (Cr 50%, C 6-8%)  prices edged  up by RMB 100/t ($15/t) at RMB 8,690-9,100/t ($1,263-1,323/t) exw, including taxes. Medium-carbon (Cr 60%, C 1%) prices remained stable w-o-w to RMB 13,300-13,500/t ($1,933-1,963/t), and low-carbon (Cr 60%, C 0.1%) gained RMB 100/t ($15/t) to RMB 14,000-14,300/t ($2,035-2,079/t), all exw and inclusive of taxes.

Ferro chrome prices remained stable with a slight upward trend, supported by firm chromium ore prices and steady production rates. However, weak stainless steel demand and cautious purchasing by steel mills kept overall market sentiment subdued.

Market Updates

Raw material market trends

The chromium ore market remained stable with a slight upward trend. Spot prices increased marginally, while forward prices stayed elevated. Overseas mines kept firm offers, and suppliers showed reluctance to sell. Although port inventories rose, supply-side pressure eased slightly.

Ferro chrome producers continued to operate at high rates, supporting steady demand for chromium ore. Meanwhile, higher inventory carrying costs kept market prices firm. Rising raw material prices increased production costs, while high smelting costs in Inner Mongolia supported ferro chrome prices but further reduced producers profit margins.

Downstream market trends

The stainless steel market remained weak, crude steel production fell significantly in February on a m-o-m  due to increased maintenance and production cuts at several steel mills, which lowered ferro chrome demand. Meanwhile, spot prices fluctuated slightly and social inventories rose marginally.

Due to weak end-user orders, steel mills continued to purchase mainly on a need-based basis rather than building inventories. Although the market expected the traditional peak season of Golden March and Silver April, overall market sentiment remained cautious.

Outlook

Ferro chrome prices are expected to remain range bound in the near term, supported by tight spot supply. However, weak stainless steel demand may continue to limit strong price gains.

(With inputs from CBC)