High Carbon Ferro Chrome market was assessed unchanged, as demand for the material remains low.
Domestic Ferro Chrome prices remain at the same level this week. Currently, High Carbon Ferro Chrome (60% grade) is being traded at around INR 69,000/MT (Ex-Works Odisha) and INR 70,000 (Ex-Raigarh). Trading activity has remained scant for quite some time but market participants are hoping for a price hike in the coming weeks as production has come down with closure of some Chrome ore mines. Most of them are waiting for the OMC Chrome ore e-auction which is to be held on 18 Jun, 2014 as it would set a price direction in the market.
OMC will conduct e-auction for sale of 60,000 MT of friable and 5,000 MT of concentrate Chrome ore on 18 Jun, 2014. In the last e-auction held on 13 May, 2014 prices were increased across all the grades. Last time 55,000 MT of friable and 7,500 MT of concentrate was on offer.
Japanese Ferro Chrome steady at 91-93 cents/lb
The spot price of HC Ferro Chrome imported into Japan at 91-93 cents/lb CIF Japan, unchanged from last week in quiet trade ahead of third quarter price negotiations. Japanese traders were sending inquiries to overseas producers to check current price levels ahead of the Q3 price talks between South African producer Xstrata Alloys and Nippon Steel & Sumikin Stainless Corporation expected to begin next week.
But, real buying interest was lacking as Japanese buyers wanted to wait for the Q3 settlements.
One deal was confirmed done at 91 cents/lb CIF major Japanese port, June-July loading from Vishakhapatnam port, for 40 MT of Indian materials with minimum 60% chrome, 2-4% silicon and 8-9% carbon; sized 10-50 mm.
SteelMint learned from market sources that Japanese traders were of the thought that prices for HC Ferro Chrome will go up.
Indian producers who source Chrome ore from third parties were forced to reduce output in the past month after the Odisha Supreme Court’s order on 16 May, 2014 to Tata Steel for suspension of Chrome ore mining. The producers were relying on state-run Odisha Mining Corporation for feedstock.
An Indian producer concurred prices were not rising despite the output cuts. “Chinese demand is not so good, we only have small businesses this week,” the producer said.
China Ferro Chrome Prices Flat amid thin Spot Import Trading
Spot prices of India-origin HC Ferro Chrome (58-60% Cr) and South Africa-origin charge Chrome (48-52% Cr) at 82-84 cents/lb CIF China and 81-82 cents/lb CIF China respectively, both unchanged on week given a lack of price indications amid thin buying interest.
Several sources from throughout the supply chain said that they did not receive inquiries, or table offers this week. “It is hard to sell material to China now. Chinese (domestic) prices are too low (compared to import offers),” said an Indian producer source.
Domestic spot prices of 50% Cr Chinese HC Ferro Chrome were at RMB 6,500-6,700/MT (equivalent to 80-82 cents/lb), delivered with 17% VAT. Prices have been range bound within these levels over the last month.
Some observers see further downside to domestic prices in near term after major Chinese stainless mills cut June domestic prices, and also amid slow demand and large supply from rising domestic production and import volumes under term contracts, said sources.
Buyers were also holding back from imports pending third quarter contract price negotiations between South African suppliers and European stainless producers.
Some industry participants see an increase in Q3 contract prices on higher production costs in South Africa, because of rising Chrome ore prices and higher winter power tariffs. If South African producers are unable to pass on the cost increase to the market, they would have to look at cutting output, which could lead to an increase in demand for Indian-origin Ferro Chrome.
Q3, however, is also the off-peak demand season in China where stainless mills typically stop production for annual maintenance, others noted.
On the future outlook, market watchers are expecting the market to get better by sometime next week as supply for the material is low. SteelMint assessed that China’s return, in the Ferro Chrome market would help in price rise as there will be an improvement in demand.
Exchange Rate: USD 1= INR 60.15
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