India: Ferro chrome prices remain firm as producers resist lowering offers

Indian ferro chrome producers kept offers firm w-o-w as they were expecting a further increase in ferro chrome purchase tender prices by Chinese stainless steel producers.

According to SteelMint assessment on 23 February 2023, ferro chrome smelters were offering at INR 125,150/t exw, the same as last week.

Factors keeping prices firm

This week, producers received moderate enquiries. Buyers with depleted inventories booked small quantities to continue production. Most buyers, including overseas buyers, were waiting for Chinese steel mills to release the tender price for March delivery. As a result, ferro chrome prices remained stable.

However, due to tight supply and expectation of further increase in Chinese ferro chrome purchase tender prices, major producers have increased their offers but they are yet to find market acceptance.

In addition, due to logistical issues caused by natural disasters, a shortage of chrome ore from South Africa and Turkey is expected. This could have an impact on prices as producers are expected to maintain offers at higher levels.

Furthermore, stainless steel prices have not risen as a result of cheaper imported material, as market participants’ attention has shifted away from domestic material towards imports. As a result of the decrease in stainless steel production, there was moderate demand for ferro chrome, keeping prices stable. Meanwhile, 304 grade stainless steel CRC was available for INR 242,000/t exw Mumbai, as assessed by SteelMint on 21 February.

China market overview:
The ferro chrome market remained stable this week, with offer prices at RMB 9,450/t ($ 1,370 /t) exw-Inner Mongolia. Meanwhile, the trading environment was favourable and trading volume remained consistent. However, ferro chrome players were taking a cautious wait-and-watch approach due to weak transaction in the stainless steel market and inventory pressure on the ferro chrome market.

Prices are expected to remain firm due to the cost poressure on ferro chrome producers.

Outlook
Market participants, particularly smelters, are optimistic and expect prices to remain on the higher side in the near term following China’s purchase tender price announcement.