The price of ferro chrome in India remained under pressure following the sharp reduction in Chinese tender prices as buyers held back from purchasing. Small quantities were booked by end-users as many buyers waited for Vedanta’s ferro chrome auction today for a clear picture to emerge.
According to SteelMint’s assessment on 1 September, ferro chrome prices were hovering around INR 94,000/t exw-Jajpur. However, due to selling pressure and weak export transactions, some producers sold material at lower prices in the domestic market. Meanwhile, buyers were negotiating for lower prices, which also kept prices under pressure.
Furthermore, producers shifted their focus to the domestic market as Chinese buyers sought material at around 83-84 cents/lb CNF China after a Chinese stainless steel giant announced a lower purchase tender price which was significantly lower than domestic offers.
In contrast, as the festive season in India is approaching producers are expecting a good response in the coming weeks and are thus loath to reduce their offers.
In addition, producers were unwilling to reduce offers since the base price at OMC’s chrome ore auction on 19 August was not lowered much in view of the decline in ferro chrome prices in the market. Ferro chrome prices of producers without captive mines have edged close to production costs, SteelMint notes. Additionally, this discouraged producers to lower their offers.
Outlook
Despite Indian ferro chrome prices falling close to the cost of production, they may drop further in the coming weeks amid weak demand. However, it is unlikely that any significant drop will occur, according to sources.
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