The Indian ferro chrome market witnessed a significant increase in prices by INR 10,500/tonne (t) w-o-w to around INR 122,000/t, with a few deals sealed at even higher levels.
The market dynamics shifted drastically after the Chinese ferro chrome smelters stopped offering in the spot market. However, this further escalated after the major smelters backed off from fulfilling their long-term contracts and reduced supply quantities. Domestic prices in China reached RMB 11,000/t ($ 1,701/t), while the last deal was concluded at RMB 10,800/t maximum.
Indian ferro chrome smelters increase offers
Indian ferro chrome market dynamics changed since last year, with most of the output restricted to a few producers. Out of those handful of producers, some are catering to the export market. Thus, only two major producers are offering in the domestic market Meanwhile, the companies have increased their offers in line with the increased ferro chrome tender prices by Chinese steel mills.
There was good demand from China, after the declaration of Chinese tender mill prices and the Indian smelters started offering cents 133/lb CNF China. However, since the past two days, demand from the export market is lagging and Chinese mills believe the prices will come down. Hence, the prices for immediate shipments came down to cents 130/lb CNF China.
OMC increases base price by 9% in upcoming auction
In line with increasing ferro chrome prices, OMC, a major chrome ore miner, increased its base price for the upcoming auction on 30 July’21. Although the prices of ferro chrome increased by around 20% m-o-m this month, the chrome ore prices were increased by 8.72% from the previous month’s auction. Major reason for the marginal increase can be attributed to lower response to the previous auctions and limited producers in the current market.
UG2 prices increase $5/t w-o-w
South African chrome ore prices increased by $5/t w-o-w to $175/t. This is the second consecutive increase after the unrest broke out in the country. Although the increase in the chrome ore prices was triggered by the unrest in the country, the increased tender prices of ferro chrome in China and the higher spot prices in the China further fuelled the increase in chrome ore prices.
Indian stainless steel mills concerned
Indian stainless steel mills are concerned with the surging prices of both the major raw materials, nickel and ferro chrome. Nickel prices have soared to $19,583/t (LME), up by $2,239/t from Jan’21, and the ferro chrome prices are at historical highs, while the demand from the domestic market is still lagging. Thus, the stainless steel mills are trying to defer their procurements and utilize their existing inventories, while those with limited inventories are buying in lesser volumes to continue the production.
Outlook
Prices in the domestic market have increased to historic highs, and the current offers are at around INR 129,000/t. However, the deals are yet to find acceptance in the domestic market.
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