India: Ferro chrome prices remains stable amid dull demand, market awaits clarity

Indian ferro chrome prices remained stable w-o-w although demand was sluggish from both domestic and export markets. Producers held on to prices in an inactive market, seeking further clarity.

According to SteelMint’s assessment on 18 August 2022, most producers were offering HC60% grade at INR 94,000-95,000/t exw-Jajpur.

Factors keeping ferro chrome price range-bound

• Dull demand: In the domestic market, buyers opted for a wait-and-watch approach in anticipation of the exact price picture to emerge after Vedanta’s ferro chrome auction and OMC’s chrome ore auction on 19 August. As a result, prices remained stable this week.
  In addition, domestic producers were not interested in export inquiries since seaborne buyers were seeking the material at lower prices. Chinese buyers countered at 86-88 cents/lb, CNF China, with producers offering around 90 cents/lb, CNF China. Thus, the disparity between bids and offers led producers to turn to domestic markets. Prices remained within the range as well.
• Stainless steel prices range-bound: Stainless steel prices were also range-bound with a marginal drop. Meanwhile, stainless steel (304 grade, HRC) prices were assessed on 16 August at INR 237,000/t ex-Mumbai, showing a marginal INR 1,000/t drop w-o-w. This also kept ferro chrome prices in a narrow band.
• Chrome ore prices drop: Imported South African chrome ore concentrate prices dropped by 15% w-o-w on CNF basis in China on 16 August as buyers negotiated hard and concluded deals at lower prices at around $200/dmt, CNF China. Meanwhile, OMC reduced the base price for its upcoming chrome ore auction.

China’s market overview
China’s ferro chrome (HC60%) prices fell by RMB 200/t ($29.46/t) w-o-w to RMB 7,850/t ($1156/t) exw-Inner Mongolia due to weak demand. Market trading volumes were average this week. Spot traders, on the other hand, were mostly cautious, waiting for clearer price directions. Stainless-steel spot transactions were relatively less, while the downstream market showed fluctuations in demand but prices remained fairly stable with marginal dips.

Outlook
Ferro chrome prices in India are expected to remain stable as domestic stainless steel production levels are seen to be rising. But demand from the export market for Indian ferro chrome may continue to be lacklustre.