Chinese prices of high carbon ferrochrome (Ferro Chrome) rose further to hit a five-month high over May 6-9, as the bid prices of domestic stainless steel mills for May were up by Yuan 200-250/MT (USD 28.2-35.3/MT) on month, according to Mysteel’s latest weekly survey.
As of May 9, the price of high-carbon Ferro Chrome with 55% Cr content in North China’s Inner Mongolia had strengthened by another Yuan 50/MT from April 30 to Yuan 6,250/MT including 13% VAT, according to Mysteel’s database.
“From late April until last week nearly all domestic major stainless makers had submitted their buying prices for high carbon Ferro Chrome for May, with all prices being higher month on month,” a Shanghai-based market insider said. “This is because most have to rely on domestic Ferro Chrome instead of using imports this month, given the serious COVID-19 spread overseas which is affecting exports and in turn, supporting Ferro Chrome prices.”
On April 30, Tsingshan Group, the country’s largest stainless producer, had announced a Yuan 250/t on-month increase in its purchases of high-carbon Ferro Chrome for May, taking its buying price to Yuan 5,647/MT including 13% VAT in terms of delivery to its plant, as reported. Significantly, the mill also promised that for long-term contract suppliers who deliver above the base-quantities specified in their contract, it will raise their Ferro Chrome unit price by another Yuan 150/MT.
Moreover, the source noted that Ferro Chrome prices are expected to increase further, as prices of the smelters’ raw material – imported chrome ore – seem certain to rise again. However, she noted that for now, ore prices remain unchanged because domestic smelters were cautious on procurement amid the current high prices.
As of May 9, the price of South Africa-origin 42% grade chrome concentrates at Tianjin port in North China had stayed at a six-month high of Yuan 30.5/dmtu for nearly three weeks, according to Mysteel’s database.
“Most market participants were bullish about imported chrome ore prices because demand from smelters is likely to be high, given that the domestic stainless mills will largely use locally produced Ferro Chrome this month and possibly even next month too,” she said. However, supplies of imported chrome ore are still seen staying tight, as the recovery of ore production and shipments from South Africa from May 1 remain slow, she added.
Although South Africa, China’s largest supplier of chrome ore, had announced the easing of restrictions on all forms of transport including road and rail transport from May 1, the lack of manpower may still slow the recovery of logistics as the management and control of workers is still very strict, as reported.
As expected, inventories of chrome concentrates at Chinese ports show signs of thinning out because of the decline in imports, the source warned. The stocks of concs at the six major Chinese ports were at around 4.1 million tonnes as of May 8, down by 81,000 MT on week, Mysteel’s database showed.
(This article has been published under the article exchange agreement between SteelMint Research and Mysteel Global.)
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