- Premiums remain low at OMC’s chrome ore auction
- Weak stainless steel demand limits Chinese buying
Indian high-carbon ferro chrome (HC 60%, Si: 4%) prices inched down by INR 800/t ($8/t) w-o-w to INR 121,500/t ($1,259/t) exw-Jajpur. Prices fell following softer bids at the latest chrome ore auction of the Odisha Mining Corporation (OMC) and the ferro chrome auction of Vedanta-FACOR.
Deals for around 3,300 t were recorded by BigMint last week within the price bracket of INR 121,000-122,900/t ($1,253-1,273/t) exw.
Low-silicon, high-carbon ferro chrome prices too edged down by INR 200/t ($2/t) w-o-w to INR 126,000/t ($1,305/t) exw-Jajpur. Meanwhile, low carbon and low phosphorus grades were steady w-o-w.
Market summary (16-22 July)
Buyer caution pulls down prices: India’s ferro chrome prices weakened as softer raw material prices, subdued demand, and cautious buyer sentiment weighed on trading activity. At OMC’s chrome ore auction held on 20 July, 60,500 t were booked out of 104,800 t offered, with bids declining marginally by 0.05-3% (INR 11-611/t) from the previous auction. Most grades attracted bids at the base price, while only a few secured premiums of 1-2% (INR 300-600/t), reflecting restrained buying interest.
Meanwhile, Vedanta-FACOR’s ferro chrome auction on 15 July saw the larger lot (Cr: 58% min, 10-150 mm) achieve an H1 price of INR 121,400/t ($1,258/t) exw.
In the spot market, lower inquiries and resistance to higher offers pushed prices lower, as major stainless steel producers had largely completed their monthly procurement. Smaller buyers continued booking limited volumes at discounted levels.
A domestic buyer told BigMint, “I have been offered material at INR 122,500/t ($1,269/t) exw, but I know it is a higher price, so I did not take it. The market is going to fall further after this. Stocks are elevated in China, OMC’s prices of ore have fallen, and, more importantly, local demand is very sluggish.”
Elevated chrome ore inventories pressure Chinese market: China’s domestic ferro chrome prices remained stable during the week, although overall market sentiment stayed weak due to slow demand from the stainless steel sector.
High chrome ore inventories at Tianjin Port continued to pressure the raw material market, offsetting support from steady South African 40-42% chrome concentrate prices. Traders offered discounts to reduce stocks and improve cash flow, while ferro chrome producers purchased chrome ore only to meet immediate requirements because of tight margins. Lower monsoon-season power tariffs supported higher ferro chrome production, keeping supply sufficient.
On the demand side, stainless steel mills remained cautious with purchases, as maintenance shutdowns and seasonal weakness in end-user demand reduced consumption. Most buyers procured only small volumes based on immediate needs. Looking ahead, China’s ferro chrome market is likely to remain under pressure as high port inventories, softer chrome ore prices, and weak stainless steel demand continue to limit any significant price recovery.
Indian stainless steel market gains fresh momentum: Prices of 304 grade stainless steel HRCs edged up by INR 2,000/t ($21/t) w-o-w to INR 215,000/t ($2,227/t) exw-Mumbai. India’s stainless steel flat products market witnessed improved momentum this week, driven by a price hike from a major domestic stainless steel coil producer, better demand, and rising raw material costs. Firmer LME nickel prices, elevated molybdenum prices, and the depreciation of the Indian rupee further supported market sentiment.
Outlook
BigMint expects India’s ferro chrome market to remain under mild pressure in the coming week.
Although improving momentum in the domestic stainless steel market and higher stainless steel prices may lend some support to demand, softer chrome ore prices, cautious procurement by buyers, and weak sentiment in China are likely to cap any significant recovery. Elevated chrome ore inventories in China and subdued stainless steel demand there will continue to weigh on export sentiment, while domestic buyers are expected to restrict purchases to immediate requirements.
Overall, ferro chrome prices are likely to remain largely stable with a slight downward bias until buying activity improves.
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