China’s ferrochrome prices exhibited stability despite market volatility. Prices experienced a slight dip of around RMB 100/t ($14/t). Here’s a breakdown:
- High-carbon ferrochrome: Prices remained steady within a range of RMB 8,750-9,050/t ($1,209-1,251/t).
- Medium-carbon ferrochrome: Prices were unchanged at RMB 14,200-14,300/t ($1,963-1,976/t). All prices are ex-works and include taxes.
Factors influencing ferrochrome market:
China’s ferrochrome market has displayed remarkable stability despite larger market volatility. This stability can be attributed to a confluence of factors:
- Moderate trading atmosphere: Market activity has been moderate, with stable external quotations from ferrochrome plants after their initial fluctuation. This suggests producers are maintaining a balanced approach to avoid drastic price changes.
- Chrome ore market consistency: Chrome ore, a key raw material for ferrochrome production, has also exhibited stability. With existing stockpiles at ferrochrome plants and limited acceptance of high-priced chrome ore, there is little incentive for increased mining activity in the near future. This consistent raw material supply contributes to the overall stability of ferrochrome prices.
- Limited demand for chrome ore: Demand for chrome ore itself appears moderate, offering no strong push for price hikes. Stable demand translates to a controlled supply chain and avoids price disruptions in the ferrochrome market.
- Stainless steel market: Similar to its upstream markets, the downstream stainless steel market has also experienced a period of stability. While some pre-holiday stockpiling has occurred, overall transaction activity consists primarily of scattered orders. This moderate demand for stainless steel prevents significant price fluctuations in the ferrochrome market.
In addition, most downstream stainless steel market participants hold a bearish outlook, resulting in low purchasing intentions for ferro chrome. This cautiousness likely stems from expectations of potential price declines in finished stainless steel products due to recent drops in nickel pig iron prices (another raw material). Lower raw material prices could incentivise stainless steel producers to lower their final product prices, impacting the profitability of ferrochrome buyers.
Outlook
China’s ferrochrome market is likely to remain stable in the short term. However, ferrochrome manufacturers must stay vigilant. Fluctuations in raw material prices and steel demand could disrupt the market. Close monitoring of these factors is essential to navigate potential challenges in the long run.
Note: This article has been written in accordance with an agreement between CBC and BigMint.