Ferro-chrome prices have some room for improvement in short term

Global Ferro-chrome
prices in the short term have some room for improvement in the first half of
2013 based on the following factors:

* Seasonal support
from stainless steel industry

* Lower Chrome ore
prices

* Capacity cut backs
in South Africa following the ESKOM deal

SteelMint started a
discussion on market outlook for ferro alloys on an online discussion forum. Top
officials from Tata Steel & Visa Steel participated in the discussion.

According to the
official from Tata steel, “Chinese buyers are keen to finish buying before the
holidays and there is some room for price improvement in the short term due to
the production cut in South Africa. Two big factors that will be crucial to
watch would be- buying pattern of Europeans & ESKOM’s buy back agreement (if
they plan to extend this beyond 31^st march”.

Tata Steel has recently shut its ferro chrome production for two months at Richard's Bay, South Africa following the ESKOM deal.

Speaking about the
Japanese buyers, he added, “The Japanese are trying to get the best deal after Yen
depreciated in the last one month. Their buying in USD is getting hurt but they
are trying to bait with their supplies”.

According to the
official from Visa Steel, “I think prices of Chrome ore Alloys have geared up
due to Chinese buying. There is still very less demand from Europe. I still
fear that the price hike may not be sustainable and we have to wait for European
buying to pick up”.

Investment bank Macquarie
also believes on firming up of short term outlook for Ferro-chrome. According to them, “In keeping with typical seasonal
patterns, demand for both stainless steel and related raw materials is reported
to be rising”.