- FeCr trades slow down as steel mills cut output
- Chrome ore tags moderate as supply stabilises
CBC: The Chinese ferro chrome market remained stable w-o-w, with high carbon and medium carbon prices showing no movement. While the market did not experience significant fluctuations, overall demand for ferro chrome slowed, especially due to a decline in production by steel mills in the southern regions. With some factories yet to start sales, the recovery of trade activity was slower than expected.
High-carbon ferro chrome: Prices stood at RMB 7,300-7,700/t ($1,005-1,060/t) exw, including taxes, unchanged w-o-w.
Medium-carbon ferro chrome: Prices stood stable at RMB 12,000-12,200/t ($1,652-1,679/t) exw, including taxes.
Factors driving market
Chrome ore supply stabilises post-holiday surge: The chrome ore market, which saw rapid price increases following tight supply after the holidays, stabilised. As supply began to normalise, chrome ore spot prices moderated, bringing relief to the market.
Major steel mills recently set flat bidding prices for ferro chrome, breaking the previous trend of price cuts. This pricing strategy, while conservative, provided some support to the chrome ore market, preventing further price erosion.
Steel market’s struggle reflects in ferro chrome demand: While the domestic steel market experienced a brief surge due to stimulus measures, the underlying issue of an imbalance between supply and demand continues to undermine its strength. Weak demand forced steel mills to cut production, which, in turn, limited the need for ferro chrome. With downstream demand unlikely to improve significantly in the near future, price pressure on ferro chrome will persist.
Outlook
In the short term, the ferro chrome market will remain weak, with slow recovery and limited changes in prices, as steel production continues to lag.
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