Ferro Chrome market remains quiet as buyers and sellers differ on commodity’s price amid uncertain currency fluctuation.
Indian Ferro Chrome producers highlighted that there is no real demand coming in from China as the depreciated Yuan has compelled them to buy the locally produced commodity. Moreover, it is understood that China has sufficient amount of Ferro Chrome after a continuous spell of increasing domestic Ferro Chrome production.
Chinese traders are pulling back from taking a position, expecting the major stainless steel firms to lower their purchase price for September.
SteelMint assessed Ferro Chrome offers at 78 cents/lb CIF China, while counter-offers are way lower and buyers are showing reluctance on the aforementioned price. In line with the Chinese market, offers to Japan and South Korea are at 86 cents/lb and 85 cents/lb respectively.
With prevailing weakness in Chinese Ferro Chrome market, offers in India has also been affected substantially.
In line with international offers, Indian prices also remained still as deals are heard to have concluded at INR 70,000-70,500/MT (Ex-Jajpur). Few producers are however offering at around INR 72,000/MT but bulk quantity deals have not been concluded yet.
SteelMint learned that most market participants hold a pessimistic outlook towards the future market trend.
Chinese Market Scenario
South African concentrates 40-42% is being traded in the range of USD 150-160/MT CIF China. Whereas the prices of chrome ore at ports witness mild fluctuations, South Africa concentrate 40-42% offered at USD 4.4-4.8/dmtu, South Africa lump 40-42% offered at USD 5.2-5.5/dmtu, South Africa ROM 40-42% offered at USD 4.8-5.1/dmtu, Zimbabwe concentrates 48-50% offered at USD 5.5 -6/dmtu, Philippines concentrates 45% offered at USD 5.2-6/dmtu, Turkey concentrates 46-48% offered at USD 6.6-6.9/dmtu.
Chrome ore stock at ports continues to be high, and the current consumption rate is still not as fast as that of new arrivals. Some traders, due to the high cost in the previous period, have a strong willingness to hold back sale and drive up the price amid recent notably increased inquiries. The price difference between the North and South port is still large, with the northern port traders more active in the sale. It is estimated that Chrome ore prices will continue to be weak in the near future.
The HC Ferro Chrome in main producing areas of China is being offered at 74-77 cents/lb. Ferro Chrome producers have sufficient stock of chrome ore, and one producer has indicated that they have enough stock for this year. The market is still dominated by long-term orders, and producers are actively producing to meet demand. Recently, inquiries for HC Ferro Chrome have been on the rise, and buyers are more inclined to purchase from nearby due to factors such as high freight rates. It is understood that some producers are also planning to expand their Ferro Chrome capacity next month.
China Iron & Steel Association issued a statement recently to prevent a new round of oversupply in the steel industry and avoid vicious competition; and called for an active response to the impact of US-made trade frictions on the steel industry.
Recently, the tender for September has commenced. As far as the current tender situation is concerned, most stainless steel mills in China have increased the quantity. One reason is that the steel market is approaching the peak season and the demand for raw materials is increasing. Secondly, the current price of Ferro Chrome is touching the bottom. Due to the low price of chrome ore, the price of Ferro Chrome has been slipping. However, attention should be paid to whether the recent environmental inspection can offset the adverse effects of weak chrome ore or not, as Tangshan has begun to limit its production in advance.
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