Ferro chrome prices slumped as mills shied away from procurement, depressing confidence in the Ferro chrome market.
In the domestic market, there is recent decline in prices on the backdrop of bearish sentiment and thin trading. Currently, 60% grade is being offered at around INR 68,500-69,000/MT (ex-works Odisha) and INR 70,000/MT (ex-Raigarh). In the last concluded e-auction held in Dec’14, Odisha Mining Corporation’s Chrome ore prices across all grades have declined slightly. As Chrome ore prices have decreased, Ferro chrome producers have also reduced their offers to entice greater buying interest.
“There isn’t too much eagerness around, and weak steel prices are eroding demand”, stated a producer from Odisha.
SteelMint assessed that weak demand has lead to marginal softening of prices, and further downfall in prices cannot be ruled out.
Chinese Market
The spot price of South African-origin charge Chrome (48-52% Cr) was assessed at 79-80 cents/lb, CIF China; down slightly from 79-80.5 cents/lb, in slow post-holiday trading. The spot price of Indian-origin High Carbon Ferro chrome (58-60% Cr) was assessed at 81-82 cents/lb, CIF China; unchanged from 26 Dec’14 amid a lack of price indications in the market.
No deals could be confirmed and most market participants pegged at 79-80 cents/lb, CIF as a range acceptable to both buyers & sellers.
Offers for Indian Ferro chrome were scant as producers continued to have limited spot material for sale given production cuts and low price expectations of Chinese buyers. An official with an Indian producer said his Chinese customers were willing to buy at 80 cents/lb, CIF.
While, trading was slow with many industry participants yet to return to the market from holidays, Chinese buyers have started inquiring for imports this week. Buyers are keen to find out offer prices after China canceled its 1% import tax on imported Ferro chrome starting 1 Jan’15, and also some Southern China-based users have difficulties securing domestic material due to output cuts in the region.
Suppliers appeared bullish about demand in the first quarter. SteelMint reckoned demand should pick up in China and the rest of Asia in the first quarter. However, many Chinese buyers remained price-conscious as Chinese domestic Ferro chrome prices have remained flat in recent weeks.
Domestic spot prices of 50% Cr Chinese HC Ferro chrome were flat at RMB 6,350-6,500/MT (equivalent to 77-79 cents/lb) W-o-W.
Japanese Market
The spot price of HC Ferro chrome imported into Japan stands at 86-88 cents/lb, CIF amid a lack of price indications with some participants yet to return to the market.
No deals could be confirmed this week. An Indian producer reported selling around 250 MT at 88 cents/lb, CIF last week for standard lumpy material for January delivery.
Indian producers reported, “Japanese buyers were looking to purchase at 84-85 cents/lb. We would not correct to this level.”
SteelMint learned from sources that there should be some pressure on spot prices, following lower first quarter term contract settlements in Japan and Europe.
Market watchers expect Ferro chrome demand in Japan to remain stable in the near-term.
Exchange Rate : USD 1 = INR 62.31
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