Indian ferrochrome prices fell further by around INR 2,750/t w-o-w to INR 82,000-82,500/t Ex-Jajpur amidst higher selling pressure. Meanwhile, Chinese demand from the spot market has dried off amidst the ongoing holidays and falling prices in the domestic market.
Key highlights:
Rising Stainless steel prices
Indian and Chinese prices of stainless steel increased after Nickel prices increased by 2% from May 1, 2021, to $17,861/t(LME), however, this provided no support to the falling ferrochrome prices. Meanwhile, many stainless-steel producers had to cut production by around 50% due to oxygen shortage, which has also reduced the demand for ferrochrome, putting the producers of ferrochrome under more pressure.
Chinese ferrochrome buyers on holidays
The Chinese market remains absent due to holidays this week. However, producers reported that there was not much demand earlier and they couldn’t book much material in the previous month as well due to the falling Chinese prices. Meanwhile, Indian smelters also remain cautious of waning Chinese demand due to increased production in China and the shift of Chinese buyers towards the domestic market. While the producers dealing in the spot market are worried about the fading Chinese demand, the long-term contracts remain unaffected.
Concerns regarding imminent lockdown
Most of the ferrochrome smelters and Stainless-steel producers remain ambiguous about the alarming pandemic situation in the country. As India breaks its own record of daily infections, the fear of stricter lockdown is looming over the producers. However, few ferrochrome producers are also of the view that it might be a support for the ferrochrome industry and the prices might increase. Meanwhile, stainless-steel producers remain pessimistic about procuring more material as the confusion on lockdown intensifies.
High chrome ore prices troubling producers
Indian ferrochrome smelters are troubled on two fronts – weak demand clubbed with higher chrome ore prices. The Odisha-based producers wrote to the Chief Secretary of Govt of Odisha, expressing their concern over the increased chrome ore prices. Most of the producers reported to SteelMint that the current prices of ferrochrome are much lower than the production cost but they are compelled to sell as they believe that the prices might touch further lows. Meanwhile, some units of Kalinganagar, are forced to reduce operations to avoid cash losses, according to the letter written to the Chief Secretary. Although the situation remains grim and the producers have taken a collective measure of requesting a reduction in prices, the chances remain low. Most producers are lifting ores at higher prices due to the low inventory available with them.
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