Indian ferro chrome market has been under balanced conditions for two weeks now, as the shortage of chrome ore is intensifying and major buyers have completed their procurement for the month.
Several producers who are dependent on merchant miners were expecting OMC to conduct auctions this month, but no announcements for auctions have been made by OMC yet, which is again problematic for many smaller producers as they might have to shut operations temporarily.
Mining operations will commence at TATA Steel’s Sukinda mines in a few days, but, whether Tata Steel Mining will sell chrome ore in the market is still uncertain.
Many of the producers had procured huge quantities of chrome ore from Misrilal mines, and which they have consumed this month, but for the next month no new supply avenues exist for them.
Meanwhile, the buying sentiments for the week remained feeble as most of the buying in the domestic market is completed for the month. All the producers with higher inventory are offering at around INR 73,000/t, however, deals for small orders are taking place at much lower levels, as few producers are under urgent need for liquidity.
Market participants are confident that ferro chrome prices will increase next month due to short supply in the domestic market.
However, international buyers are precariously waiting for the Chinese tenders. Producers of ferro chrome believe that there are high chances for an uptick in the purchase tender prices as international prices of Chrome ore have picked up, which is being readily accepted in the Chinese market due to Chinese Yuan appreciation. There is also a boost in the Chinese domestic prices of ferro chrome. However, due to various internal and external factors involved, domestic producers are in an advantage in the Chinese market.
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