India: Prices of ferro chrome reduces due to persistent low demand

Indian ferro chrome prices fell by INR 1000/t w-o-w as producers had to lower offer prices to conclude deals in the domestic market.

Producers have been mostly exporting ferro chrome directly or through merchant exporters. However, with the Chinese demand for ferro-chrome drying up, most of the producers are now relying on domestic sales. Lacklustre downstream demand for stainless steel makers is pressuring ferrochrome sales in the domestic market.

Domestic buyers are also unwilling to accept higher offer prices since they are aware of the dull China market and expect prices to drop in India too. For now ferro-chrome producers are resisting a further price cut, said an Odisha-based producer.

Market participants anticipate customs clearance of ferro chrome might get affected due to geo-political tensions between India and China, the biggest market of ferro-chrome for India. Port clearances have not been affected yet but the situation remains dynamic.

Current Assessments
The prices for Ferro Chrome assessed by SteelMint are as follows:
Ex-Jajpur: INR 63,000-64,000 /t,
CNF China: 67¢/lb,
CNF Japan: 70¢/lb, and
CNF South Korea: 69¢/lb

Chinese Market:

The Chinese ferro chrome tenders were released earlier this week. Major stainless steel mills reduced ferro chrome purchase tender prices by RMB 100/t ($14.13/t) M-o-M, for July deliveries. Spot market remained dull with limited transactions. It is expected that by next week, smaller mills may confirm their orders, which may trigger positive sentiment in the spot market.

OMC cancelled auctions for June:
OMC didn’t auction chrome ore in June, as the production quantity was quite low due to monsoons and Covid-related disruptions. OMC typically sells about 70,000-80,000t of material every month. But, if the situation doesn’t improve, they might have to postpone the auctions for July as well. This may support ferro-chrome prices in the near term.

Outlook
Scarcity of raw materials may support prices though slow demand will continue to pressure prices. On the whole, July prices may be stable.