India: Ferro-chrome prices fall as demand dries up

Indian ferro-chrome prices had risen in the past few weeks after the Chinese ferro-chrome purchase tender prices were released. However, the prices have corrected due to the dull demand at both fronts – domestic and export markets. The Chinese demand for ferro-chrome has slowed down, after the spurts in demand witnessed in the earlier weeks of May. Most producers sold material through traders or merchant exporters and were not offering much quantity in the domestic market. However, there is still a lot of quantity from the major producers that are dependent on the domestic market, but the stainless-steel mills are yet to start operations. The overflow of supply has dragged down the prices of ferro-chrome in the domestic market.

Chinese market:
This week the chrome ore prices fell marginally at the Chinese ports. This also dragged down the prices of ferro-chrome in the Chinese market. The buying is almost near to absent this week due to a confluence of factors as the Chinese market is flooded with Indian ferro-chrome and also the buyers are waiting for the next tender prices (which might be released early next week), there is an anticipation that the prices might drop down. Nevertheless, as the ferro-chrome production capacity and logistics in South Africa have not recovered, the market still has a certain degree of support from the curtailed supply.

Current Assessments
The prices for Ferro Chrome assessed by SteelMint are as follows:
Ex-Jajpur: INR 64,500 – 65,000/t,
CNF China: cents 68/lb,
CNF Japan: cents 71/lb, and
CNF South Korea: cents 70/lb.

Outlook:
The prices of ferro-chrome might remain stable for now, but the tender prices next week will play a major role in the future trend of the market. The domestic market still looks dull and the producers will tend to remain inclined towards exports. However, with the geopolitical tensions between India and China getting intensified, market participants are worried that trade will take a backfoot. Firstly, hit by the pandemic, which the market is yet to recover from, the political tensions could further adversely impact sales for the domestic producers.