China’s Tsingshan Group, Baosteel the major players in the global stainless steel industry, have all reduced their purchase price of high carbon Ferro Chrome by a substantive 600 Yuan M-o-M to set it at around 6,850-6,900 Yuan per metric tonne (equivalent to USD 81 cents/lb) for May’18.
Today Tsingshan steel has taken the lead to announce the tender price for May: 6896 rmb/50 basis (delivery to factory, cash inclusive of tax), a drop of 600 RMB. The fall in Purchase Price is in line with market expectations as Ferro Chrome demand from Chinese Stainless Steel had been on a continuous downtrend.
Market participants believe that Chrome ore price had been reduced even before the tender price came into being. It was offered in the market based on Ferro Chrome price coming down. Thus, Chrome ore prices will no longer dip sharply following the announcement.
At present, there is apparently no favorable news in the market for HC Ferro Chrome and price of chromite ores is faltering. Some participants predict that a turnaround could hardly appear in a short period of time. Needless to say, Ferro Chrome producers will keep their quotation close to the tender price. But given that current price has touched the red line of their costs with some already suffering loss, only a few producers are in a position to sell at lower prices. In fact, as reported by our Chinese correspondent, some producers have stopped production for maintenance in the face of consecutive price drops. Meanwhile, others have their production fully committed to May orders and some will just hold on to their stocks and avoid selling at such low prices.
Chrome Ore stock level at Chinese ports is around 3.04 million tonnes and the price of South Africa Chrome Conc. 40-42% is at USD 190-200/MT CIF China.
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