Indian ferro chrome prices remained range bound amid the supply shortage as some plants were unoperational since the past few days.
According to SteelMint’s assessment on 4 May, Indian producers were offering at around INR 125,000-127,000/t exw-Jajpur.
A few deals were concluded at these levels for bulk orders this week, after the Vedanta auctions fetched bids of around INR 124,500/t for 10-150 HC ferro chrome last week. Post-auctions, producers increased their offers last week.
However, some major producers tried to push up their prices to around INR 128,000-130,000/t but tepid consumption and demand due to sluggish stainless-steel marketkept prices firm w-o-w.
Many smaller plants also switched to manganese alloys amidst better profit margins and higher demand while some others reduced their production owing to power outage. Thus, only a handful of producers with large production volumes were present in the market, creating supply crunch in the domestic market.
In addition, seaborne buyers were less interested in Indian ferro chrome as their domestic prices are comparatively low. Indian offers are even higher than the purchase tender prices of major Chinese buyers. However, increased chrome ore prices have risen the production costs in China. Some Chinese traders have started offering at higher levels.
On the other hand, chrome ore supplies from the major mines located in Sukinda Valley, having approx 96% of Asia’s chromite ore reserves, are stuck because of disruptions caused by the transporters’ strike who are demanding a 20% increase in freight rates. This compelled producers to reduce their offers amid muted demand in an anticipation of a shortage of the raw material in the near term.
Outlook
Although most ferro chrome plants in India still have enough raw material to operate but if the strike continues and chrome ore supply constraints intensify, ferro chrome producers will be forced to accept the transporters’ demands, which might adversely affect ferro chrome prices.
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