- Chrome ore tags rise on supply shortages
- Steel mill bids show signs of increase
CBC: Chinese ferro chrome prices edged up w-o-w, largely driven by rising raw material costs – in particular, the increasing prices of chrome ore. Low-priced chrome ore was scarce in the spot market, and steel mill bids showed signs of increase.
High-carbon ferro chrome: Prices stood at RMB 7,790-8,200/t ($1,073-1,130/t) exw, including taxes, rising by RMB 150/t ($21/t) w-o-w.
Medium-carbon ferro chrome: Prices increased by RMB 200/t ($28/t) w-o-w to RMB 12,200-12,400/t ($1,681-1,709/t) exw, including taxes.
Factors driving market
Chrome ore market faces supply crunch: Supply shortages of chrome ore, a key material, emerged last week, due to delays in the recovery of shipping capacity at major South African ports. As a result, spot resources were in short supply, and miners took a firm stance on price support. Low-priced spot material was unavailable in the market, and fluctuations in these bids contributed to uncertainty.
Furthermore, volatility in international energy prices and the weakening of the South African rand continued to keep import offers high, though some traders were cautious.
Mills’ bids trend up, but uncertainty prevails: While there are signs of increases in bids from steel mills, uncertain supply-demand dynamics persist. The market is closely watching the outcomes of the next round of steel mill bids, as they will have a significant impact on future price trends and market sentiment.
Downstream market pressures persist: Despite the recent stimulus from the domestic quantitative easing policies, the steel market’s performance remained weak. The ongoing imbalance between supply and demand has yet to be fully addressed, and weak demand continues to pressure prices. With no significant improvement expected in downstream demand, the supply side will likely focus on reducing output. This ongoing imbalance will likely be reflected in the mining sector, where price pressures are expected to persist.
Outlook
The uptrend in the ferro chrome market is currently influenced by rising chrome ore prices, which have provided strong cost support. However, cautious sentiment prevails due to uncertainty around steel mill bidding. As a result, in the short term, the market may remain range-bound, with slight market adjustments.
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