The Ferro Chrome prices have come under rigorous pressure as bearish sentiment prevails amid continuous lull in demand.
Sluggish stainless-steel market in China has pushed the Ferro Chrome prices near to the bottom. “There is no demand coming in from China as they have sufficient supply in China and that too at much lower levels than what we can offer at,” quoted an Indian producer.
Considering the soft demand of Ferro Chrome in the market, the Chinese stainless-steel majors also reduced their purchase prices by around RMB 50-150/MT to around RMB 6700/MT for December.
The spot price of Ferro Chrome is likely to be in line with the tender price set by the major steel firm, however, few sources claim that the drop in tender prices is lower than what was expected.
The South African UG2 Chrome Ore prices has also come under pressure and most buyers in China are showing reluctance to buy at USD 165/MT levels. Chrome Ore at Chinese ports till last weekend was recorded at 2.84 MnT.
SteelMint assessed Indian Ferro Chrome price at 74-75 cents/lb CIF China while deals are yet to be concluded at the above-mentioned price. In line with the Chinese prices, Japan, and South Korean market also witnessed a similar decline in prices to 82 cents/lb and 81 cents/lb respectively.
A downtrend in Ferro Chrome prices has also been observed in the domestic market where prices slid to INR 71,000/MT (Ex-Odisha). However, buyer sources believe deals are likely to be concluded at INR 68,000-69,000/MT, as demand from China has reduced substantially owing to piled up Ferro Chrome at Chinese mills, restricting demand for further imports.
SteelMint assessed that in the short-term the downward pressure on Ferro Chrome will lighten to some extent, but the sharp falling Stainless Steel prices is a major point of concern as mills cutting capacity or plant shutdowns is a high possibility.
On the other hand, the selling price of Ferro Chrome is close to the Cost of production and the tender price is better than expected. In view of this, that Ferro Chrome may run stable in the short-term and a further sharp fall is unlikely.
However, if Stainless Steel prices fall further, it will pull down Alloy prices as well.
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