- High mill operation rates to ensure healthy demand
- Higher bids by HBIS Group signal further price gains
Mysteel Global: Prices of high-carbon ferro chrome (HC FeCr) in China’s domestic spot markets have remained strong recently, with the upward trend poised to continue in the near term on the back of buoyant raw material prices and robust demand, Mysteel Global notes.
Quotes for seaborne chrome concentrates imported from South Africa have maintained upward momentum recently. The near-term outlook for the chrome ore market also remains sanguine, given the high domestic production of HC FeCr, according to an industry insider based in Wuxi. “Consequently, this is expected to provide firm support to FeCr prices,” she said.
On 16 September, Mysteel assessed CIF prices of 40-42% chrome concentrates shipped from South Africa to Tianjin at $278/dry metric tonne (dmt), higher by $1.5/dmt from a week earlier.
Meanwhile, portside prices have also been firm recently, with those of 40-42% South African chrome concentrates assessed at RMB 56.5/dmtu ($8/dmtu) on the same day, flat from the previous week.
The continued firmness in chrome ore prices — accounting for a significant portion of the smelters’ production costs — leaves little room for FeCr prices to retreat, a market source commented.
In parallel, the high operation rates for crude stainless steel being observed by China’s stainless mills ensure demand for the ferro alloy will stay healthy. This has translated into brisk orders received by smelters for the ferro alloy recently, Mysteel Global notes.
China’s already-high crude stainless output should climb again this month, according to the results of Mysteel’s most recent survey among the 43 stainless producers it regularly tracks nationwide. The total volume scheduled is estimated at 3.44 million tonnes (mnt), higher by 3.8% from actual production in August. Moreover, if realised, this would also be 4.8% higher y-o-y.
Specifically, output for crude ferritic stainless steel — a key consumer of HC FeCr — is forecast to increase to 604,200 tonnes this month, marking a m-o-m rise of 5.9%, the survey results suggest.
Furthermore, higher bid prices from HBIS Group, China’s second-biggest steelmaker, also point to further increases in the FeCr market, Mysteel Global suggests.
On 16 September, HBIS, based in North China’s Hebei province, raised its bid price for HC FeCr for September delivery by RMB 600/t ($84/t), to RMB 9,070/t ($1,277/t), 50% Cr basis, including tax and delivery.
Also, as of 16 September, Mysteel’s assessment showed that prices of 55% HC FeCr in Inner Mongolia, the key reference price in the domestic FeCr markets, had reached RMB 8,500/t ($1,197/t), ex-works, including VAT, flat from a week earlier but representing a surge of RMB 1,400/t ($197/t) from the trough of RMB 7,100/t ($999/t) witnessed at the start of the year.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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