India’s ferro chrome prices rose by around INR 4,700/t w-o-w following production cuts amid power outage. Meanwhile, increased chrome ore prices have pushed up the production cost of ferro chrome, leading to the price hike.
According to SteelMint’s assessment on 27 April, ferro chrome offers stood at around INR 125,900/t exw-Jajpur. However, some major producers have started offering at higher levels at around INR 127,000-128,000/t exw despite weak demand.
Why did price increase?
- Production curtailment: The ferro chrome smelters in India have curtailed production as a result of power shortages due to a coal shortage. Furthermore, some manufacturers are still focusing on producing manganese alloys, resulting in lower production.
- Higher chrome ore prices: Chrome ore prices are at a record high level due to the supply shortage and high freight costs, thus, increasing ferro chrome prices. Due to a reduction in production and an increase in over-all transactions, the smelters have raised prices despite good profit margins.
- FACOR auction supports prices: FACOR’s auction was concluded at around INR 124,500/t exw, an increase of 5% over the floor price. As a result, other producers increased their offers.
- China’s producers hike purchase tender price: China’s major producers have raised its purchase tender price for May shipments amid increased chrome ore prices. This also prompted producers to raise their offers.
Outlook
India’s ferro chrome smelters are optimistic about the sentiments in the domestic market due to better realisations compared to exports, SteelMint understands.
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