Indian Ferro Chrome Exports to China and Japan Shrinking

Ferro chrome prices remained under pressure worldwide on low demand from stainless steel mills, and devaluation of the Chinese Yuan.

The ferro chrome market continues to suffer from lack of activity. Very few export deals were heard to be concluded in the month of August. Most of the large shipments were for South Korea. Two shipments were recorded this week to South Korea of 3,000 MT and 4,000 MT. The FOB value recorded was around USD 1,044 /MT ( 79 cents/lb). There has been an absence of spot demand from China and Japan, although few Indian companies are under long-term contracts and were exporting to them. Demand is expected to improve from Europe in September when buyers return to the market after vacations.

Spot prices for imported HC ferro chrome to Asia is under pressure after the currency devaluations. SteelMint learned from market sources that Chinese companies indicated possible buying interest at 73 cents/lb, whereas Indian companies were amiable to selling at around 74.5-75 cents/lb. Indian producers have lowered their price targets in sight of the INR depreciation and low ocean freight.

The spot price of South African-origin charge chrome (48-50% Cr) was assessed at around 76 cents/lb CIF China. Although, there is not much demand in China for importing the material with unfavorable currency exchange rate.

Domestic Market

There were only a few inquiries for ferro chrome in the domestic market and most Indian producers are of the view that prices have bottomed out. Currently, 60% grade is being offered at around INR 63,000-63,500/MT (ex-works, Odisha) and INR 64,000/MT (ex-Raigarh). Producer sources said that they were aware of lacklustre stainless steel market and could allow additional discounts on bulk booking, but with no inquiries it was difficult to see where the tradable value was.

“Demand for steel is very poor and since buying continues to be weak, the market is already on a downtrend with no visible recovery,” stated an Odisha based producer.

SteelMint assessed the near-term expectation is of prices to remain under pressure but due to rising input cost, prices are unlikely to come down. Participants reported that market will remain weak, with low ferro chrome demand worldwide.

Source: Provisional Customs data