Indian High Carbon Ferro Chrome market was in a lull as China went on holiday and nobody was inquiring for any material.
Domestic High Carbon (HC) Ferro Chrome market witnessed muted demand as end-users withdrew on shaky market sentiment. Current HC Ferro Chrome (60% grade) is offered at INR 69,500/MT (Ex-Works Odisha), equivalent to 87 cents/lb, considering Indian Rupee at 60 per USD.
In Raigarh, prices are at around INR 70,000/MT. Indian producer sources said, they were closely monitoring Chinese stainless steelmakers for May purchase prices, as they are relying heavily on export sales.
“But, if the local Ferro Chrome producers are not able to sustain businesses at this price, mills may be forced to halt operations temporarily till market conditions improve,” said one Indian producer source.
Chinese Market
Domestic spot prices of HC Ferro Chrome (50% basis Cr) in China were unchanged since 09 Apr, 2014 at RMB 6,600-6,800/MT (81-83.5 cents/lb) delivered with 17% VAT. In the week gone by trade was quiet ahead of the May Day holidays from Thursday to Saturday. Sources said the rebound in Chinese domestic stainless steel prices was not supporting the Ferro Chrome market as the surge was mainly concentrated on the 300-series, whereas the prices of 400-series stainless steel, where Ferro Chrome is a major raw material, have remained flat.
China’s Jiuquan Iron & Steel has cut its HC Ferro Chrome purchase price by RMB 100/MT (USD 16/MT) to RMB 6,500/MT (80 cents/lb), including 17% VAT for May. This was larger than Baosteel’s RMB 50/MT cut, tabled last week, but still within expectations. Baosteel had set its May purchase price at RMB 6,650/MT last week.
Industry watchers were expecting major stainless mills to either roll over or cut Ferro Chrome purchase prices by RMB 50-100/MT for May deliveries on weak demand and high supply. China was closed for Labor Day holidays from 01-03 May, 2014.
Shanxi Taigang Stainless Steel had yet to table its price as of Monday afternoon. The stainless producer had previously cut its April purchase price by RMB 100/MT from the previous month to RMB 6,500/MT.
“There will be also a change soon as the Chinese stainless steelmakers have difficulties to secure more volumes from the domestic market,” said one producer source. Some Chinese mills were possibly affected by the tightening supply of Kazakhstan material, the producer added.
Other Overseas Market
Indian producers have offered lumpy HC Ferro Chrome in a wide range of 87-90 cents/lb CIF Japan this week.
One Indian producer said, he had not received any inquiry in the past three weeks and put his price idea at 87-88 cents/lb CIF Japan, on the basis of spot sales prices to China at around 84-85 cents/lb CIF China. Japanese spot prices are generally 3 cents/lb higher than those to China, due to higher freight costs and Japanese buyers requiring lower phosphorous content. Other Indian producers offered at 90 cents/lb CIF Japan, for over 200 MT for May loading from Vizag or Kolkata.
“Offers have gone up affected by rising prices in Europe and the second quarter settlement (between Nippon Steel & Sumikin Stainless Steel and Glencore Xstrata) rising 4 cents/lb from Q1,” said a trader from Japanese company which has its office in Mumbai.
Meanwhile, spot prices in South Korea remained stable w-o-w, sources said. An Indian producer reported a sale at 88-89 cents/lb CIF Busan for 500-1,000 MT for May loading. South Korean spot import prices are generally 1 cent/lb lower than Japan due to lower freight cost from India.
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