Indian ferro chrome prices remained relatively stable before the next Vedanta ferro chrome auctions. Currently, prices are hovering in the range of INR 92,500-93,500/t. However, producers are quoting much higher prices. Although demand from China is still lagging, Japan and Korea have accepted the higher offers. Most of the deals recorded by SteelMint happened for South Korea, while Japanese deals were limited as there is still some resistance to the higher prices.
“There is a strong demand for ferro chrome but the supply is restricted in most of the producing markets,” a producer told SteelMint.
China
Prices in the Chinese market increased after news of production cuts in Inner Mongolia and Ningxia came in early this week. The prices increased by RMB 100/t week-on-week (w-o-w) after the news. And the increased UG2 prices also supported the rising ferro chrome prices. Although there was a little skepticism after the tender prices were lowered by RMB 50/t for June, the current supply uncertainties have fuelled the price firmness in the market. Current prices of ferro chrome in Inner Mongolia are at RMB 7,650/t, while the offers are as high as RMB 8,000/t.
South Africa
Electricity tariffs have increased in South Africa with the onset of winter there. That apart, power restrictions have further led to increased prices of chrome ore and lower production of ferro chrome. Thus, the offers from South Africa have increased since the start of the month.
Currently, the offers range from 96-102 cents/lb. Although acceptance from the Chinese market remains limited, the European market remains active in booking at higher prices.
India
Indian ferro chrome producers are already hit by higher production costs for ferro chrome. Combined with the recent lag in demand from China producers are not too optimistic at present. Thus, many of them have either completely or partially shut down their operations, leaving only a handful active in the market. However, due to increased supply shrinkage, the domestic market saw an uptrend in prices for the last two weeks. But the trend reversed this week, as buyers are reluctant to accept higher offers. However, many deals were recorded for South Korea at around cents 96-101/lb CNF, and some quantity was booked for Japan at cents 99/lb. The demand from Japan and South Korea picked up after the rise in stainless steel prices.
Outlook
Although demand has picked up from Japan and South Korea, Indian smelters are still waiting for the Chinese market to pick up. China remains the largest buyer of Indian ferro chrome, and the absence of Chinese buyers in the spot market is still a concern.
Meanwhile, producers are also waiting for the next round of chrome ore auctions, and expect the prices to be lowered to support the ferro chrome smelters and prevent further closures.
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