CBC: Chinese ferro chrome prices were on an upward trend w-o-w benefiting from rising raw material costs.
High-carbon ferro chrome: Prices stood at RMB 8,040-8,450/t ($1,095-1,151/t) exw, including taxes, rising by RMB 250/t ($34/t) w-o-w.
Medium-carbon ferro chrome: Prices increased by RMB 100/t ($14/t) w-o-w to RMB 12,300-12,500/t ($1,676-1,703/t) exw, including taxes.
Factors driving market
Rising raw material costs support prices: Rising raw material prices has strengthened the pricing environment, which has led to an increase in ferro chrome prices. The scarcity of low-priced spot goods is becoming more pronounced, while steel mill bidding prices are expanding. The market continues to exhibit a strong, positive momentum.
Shipping delays in South Africa, tightening spot market: Shipping delays at major South African ports have contributed to a tight spot market, with limited low-priced resources available. Miners are maintaining a strong stance, and the absence of affordable spot resources is evident in the market.
While attention remains on the upcoming steel mill bids, uncertainty regarding price fluctuations is impacting market sentiment. Smelting plants faced operational difficulties, and tensions between upstream and downstream sectors remain high. In the futures market, volatility driven by international energy prices and the weakening South African Rand are keeping foreign market quotations elevated, prompting some traders to be cautious about pursuing further price increases.
Persistent supply-demand imbalances: The steel market has recently seen an uptick, largely due to the stimulus from domestic quantitative easing policies. However, underlying issues remain, with supply-demand imbalances persisting and weak demand still dominant. This results in the supply side’s only viable response being to reduce supply. While there may be some temporary improvements in steel demand, significant long-term recovery is unlikely. Price pressure will persist, ultimately impacting the mining sector as these trends are fed back down the supply chain.
Outlook
The ferro chrome market remains in a delicate balance, with rising chrome ore prices supporting sentiment, while concerns over steel mill bidding prices and demand uncertainties persist. Short-term market movement will likely involve small adjustments, requiring close monitoring of steel bidding and ore price fluctuations.
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