Indian ferro chrome prices dropped sharply by around INR 5,250/t w-o-w as producers had to lower their offers in order to close deals this week despite high production cost.
According to SteelMint assessment on 17 November, smelters were offering around INR 99,000-100,000/t exw Jajpur, and 2,000 t trades were recorded after prices were reduced.
Factors driving prices down
- Buyers’ wait-and-watch attitude: Domestic buyers remained silent, opting for a wait-and-watch strategy, expecting prices to fall following Vedanta’s ferro chrome auction on 10 November. As a result of the prevailing selling pressure, producers were forced to lower prices.
- China’s ferro chrome prices under pressure: The ferro chrome market in China remained weak, with the trading atmosphere deteriorating amid bearish steel market sentiments and contracting margins of producers. As a result, ferro chrome prices in the spot market remained under pressure. Chinese buyers sought material from an Indian seller at a price which was lower than domestic offers. As a result, Indian smelters have no choice but to focus on the domestic market and as inventory kept piling up, prices fell.
- Stainless steel prices firm: Stainless steel prices remained firm, however, with a slight uptrend seen due to an uptick in London Metal Exchange (LME) nickel prices. However, there was lack of demand in the market. Sources said that the market conditions could improve after mid-December. Meanwhile, Indian stainless steel (304 grade, HRC) prices were INR 244,000/t exw-Mumbai on 15 November. This, too, discouraged buyers from booking ferro chrome at higher prices.
Outlook
The Indian ferro chrome market is expected to remain bearish in the coming weeks due to continued weak demand. However, the positive response to OMC’s chrome ore auction may support prices in the short term.
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