The ferro chrome prices in India have continued to strengthen on tight availability and improved domestic demand.
Key Highlights:
A leading ferro chrome manufacturer confirmed a deal concluded at INR 73,500/t ex-works for 350 tonnes of grade 60% Cr (medium Phos).
However, after this deal, the same Company is not offering more material in the market as it anticipates a further rise in prices very shortly.
According to our estimates, ferro chrome production in India remained flat m-o-m at around 82,000t in Aug’20. The major producers – IMFA, Tata Steel, Jindal Stainless and Visa Steel have contributed to two-thirds of the production in Aug’20. Out of this most of their production is either for exports or captive consumption in the case of Jindal Stainless.
The domestic buyers have no option but to accept the sellers’ offer as hardly any Indian producer has stock available with them for supply in September.
It is still uncertain whether OMC will conduct an auction this month, as there was a low-pressure build-up in the State of Odisha at almost every week in August – severely hampering production. Odisha contributes almost entirely towards the ferro chrome production in India.
Meanwhile, the stainless-steel sector in India is performing well and most of the producers are operating at capacity. Thus, the demand for ferro chrome is looking healthy in the near-term.
Export prices witnessed a slight uptick from last week. However, with Chinese Yuan appreciating Indian suppliers are hopeful of better demand from China, as import parity improves versus domestic procurement for them.
Future Outlook:
Ferro chrome production has been impacted by the imposition of lockdown and later due to the shortage of ore supply during monsoons. Going ahead, COVID induced disruption is likely to weigh down on ferro chrome production in India as reports of coronavirus cases emerge at plant sites.
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