India’s ferro chrome prices increased by INR 3,650/t w-o-w on good export demand amid supply disruptions in major producing countries like South Africa and Turkiye.
Ferro chrome producers were offering around INR 121,000-122,000/t exw on Friday and Saturday, according to SteelMint’s weekly assessment on 16 February. However, as a result of the good inquiries received from overseas buyers, smelters began offering at around 124,000-126,000/t exw in the early part of the week. Meanwhile, some market participants struck deals for silicon content less than 3% and sizing material at around INR 130,000/t exw.
Rationale-
This index has been derived based on transactions, offers, bids and indicative price data sets. Transactions are considered as T1 and given a weightage of 50% whereas other data sets are considered as T2 and given a weightage of the balance 50%.
As a result, the final price for ferro chrome exw Jajpur was reached to eight months high at around INR 125,150/t with transaction volume of around 5,000 t, assessed on 16 February.
Factors boosting prices:
- Good demand from European countries: Due to supply disruptions in its major importing countries, South Africa and Turkiye, Indian smelters received numerous inquiries from European countries. Furthermore, the largest chromite producer in Turkiye, Yildirim Group, declared force majeure due to logistical issues caused by the earthquake in eastern Turkiye on February 6.In the wake of rail infrastructure damage, South Africa’s Transnet Freight Rail (TFR) has suspended some freight rail services to several neighbouring countries. As a result, market participants’ concern about transportation disruption drove up prices amid good demand pouring into India.
- High chrome ore prices: According to SteelMint’s assessment on 14 February, chrome ore prices in China were still at higher side. UG2 chrome ore prices were being offered at USD295/dmt while Turkish chrome ore’s offer were remained at higher level at USD 365/dmt on CNF China. The chrome ore market in China remained strong, the market trading environment has been favourable, and the actual trading volume has remained stable. Furthermore, a 17% m-o-m increase in the base price of chrome ore in the OMC’s chrome ore auction encouraged buyers to increase their bids.
Outlook
Market participants are optimistic, and producers have begun to offer at higher levels. On top of that Indian smelters are expecting a price increase in China’s upcoming purchase tender. However, the overall ferro alloys market in China is quite stable, but improved demand amid low inventory and limited chrome ore supply which encouraged market participants to be optimistic.
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