China’s Tsingshan Group, Baosteel and Taiyuan Iron & Steel (Tisco) – the major players in the global stainless steel industry, have all reduced their purchase price of high carbon ferro chrome by a substantive 800 Yuan M-o-M to set it at around 6,900-7,100 Yuan per metric tonne (equivalent to USD 81-83 cents/lb) for Dec’17.
The fall in purchase price comes with no surprise as Ferro Chrome demand from China has been on a continuous downtrend from October. Moreover, this sharp fall can also be attributed to the weak Stainless Steel market in China.
Most market sources are of the view, that the primary reason for the reduction in purchase prices of ferro chrome is that there is ample supply of Ferro Chrome in China, thereby requirement to procure Ferro Chrome is much lower. Furthermore, the major stainless steel mills are restricted to a limited production, as the Chinese government has implemented a resolution to curb pollution.
SteelMint assessed that this sharp fall in purchase price is indicative of the fact that Ferro Chrome demand from China’s Stainless Steel sector is down drastically and is likely to push Chrome Ore prices further down. This will in-turn pressure global Ferro chrome offers to correct significantly.
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