CBC: The Chinese ferro chrome market indicated a period of consolidation, shaped by various dynamic factors in production, raw material supply, and demand fluctuations.
Prices
High-carbon ferro chrome: Prices stood at RMB 7,300-7,700/t ($1,006-1,062/t) exw, including taxes, unchanged w-o-w.
Medium-carbon ferro chrome: Prices edged up by RMB 100/t ($14/t) to RMB 12,000-12,200/t ($1,654-1,682/t) exw, including taxes.
Factors driving market
Supply-side pressures and stable inventory levels: Recent declines in the operational activity of steel mills, particularly in the southern regions, have led to a slowdown in ferro chrome demand. Despite this, ferro chrome and chrome ore inventories remain at normal levels, providing some stability to the market. The supply-side constraints caused by lower steel production have, however, failed to ignite any substantial price movement.
Raw material market stabilization: Chrome ore prices surged following a post-holiday supply tightness, but the market has since stabilized. Major steel mills’ flat bidding for ferro chrome has removed some of the downward price pressures, offering a positive outlook for chrome ore. As supply conditions have normalized, the market is expected to remain stable in the short term, without drastic changes in the pricing of raw materials.
Weak downstream demand and economic constraints: Although the steel market benefitted from earlier stimulatory domestic policies, the underlying issue of supply-demand imbalance continues to stifle robust growth. A lack of significant improvement in downstream demand, combined with ongoing price pressures, suggests that the ferro chrome market will remain subdued. The slow pace of steel mill bidding further reflects cautious sentiment, with traders preferring to adopt a wait-and-see approach.
Outlook
The ferro chrome market will likely remain weak in the short term, marked by small price adjustments and subdued demand.
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