Why are Global Ferro Chrome Prices Rising?

Ferro Chrome prices have witnessed a sharp rise in line with a strong stainless steel market in China and high demand for the Alloy.

Global Ferro Chrome prices have risen sharply primarily due to rising Chrome Ore prices and abundance of Ferro Chrome demand in China. The same can be attributed to limited domestic Ferro Chrome production amid strengthening stainless steel prices in China.

Environmental inspections in China is also resulting in shutting down of some Ferro Chrome plants as the country tries to control air pollution before winter arrives. This is also supporting Ferro Chrome prices to go higher amid greater dependence on imports.

“Recent hike of around RMB 1500/MT in the purchase price for September by major Chinese stainless steel firms owing to increasing demand has supported the rise of Ferro Chrome prices,” said a producer source from India.

SteelMint assessed current export offers at 100 cents/lb CNF China. Other Asian markets ( the epicenter of world Stainless Steel manufacturing) are also expected to follow the Chinese market higher.

EXPORTERS

South Africa is the biggest exporter of Ferro Chrome in the world, with a global production share of around 35%, and exports the commodity to all geographies. The lion-share of its exports are to China, who accounts for half of the world’s Stainless Steel production. However, China’s Ferro Chrome imports from South Africa reduced drastically by 50% in H1CY17 against H1CY16. The main reason for South African Ferro Chrome exports to dwindle can be attributed to some logistical issues faced by the Country and few plants deciding to go out of operation during the winter months. South Africa’s Ferro Chrome exports reported a fall of almost 15% in H1CY17 to 1.73 MnT in contrast to 2.02 MnT in the similar time span of the previous year.

India, on the other hand, reported a sharp rise in its Ferro Chrome exports. It can be said that South Africa’s loss was India’s gain. The export numbers show that Indian Ferro Chrome exports stood at 0.43 MnT in H1CY17, up by almost 57%, against 0.27 MnT in H1CY16. With better realization in the export market, Indian producers allocated a bigger quantum for export sales. Usually, India exports half of its yearly production of around 1.15 MnT. Most of Indian Ferro Chrome exports is to the Far-East Asian countries and China being the leading buyer. China’s demand for Indian Ferro Chrome increased on the possibility of quicker delivery. China, being the largest importer, recorded a mammoth increase of 197% Y-o-Y in H1CY17 in its Ferro Chrome exports from India.

Another Country worth mentioning is Kazakhstan, that exports Ferro Chrome to the niche segment of all geographies. However, Kazak export data from the Customs is not available.

IMPORTERS

The Chrome Industry has been experiencing a very encouraging phase as a result of positive global economic conditions and in particular China which has had a significant impact on the prices and demand for Ferro Chrome. China imported 1,34 MnT of high-carbon Ferro Chrome in H1CY17, an increase of 7.25% year on year, according to Chinese customs. In 2017, China imported an average of 224,078 MT of Ferro Chrome per month. In 2016, the monthly average import volume was 232,058 tonnes. The biggest exporter of Ferro Chrome to China is South Africa, followed by Kazakhstan.

Japan registered an increase of 12% Y-o-Y in its Ferro Chrome imports during H1 2017 against H1 2016 with South Africa being the prime exporter. South Africa recorded an increase of 8% Y-o-Y in its exports to Japan followed by Kazakhstan and India.

EU witnessed a substantial decrease of 26% Y-o-Y in its Ferro Chrome imports during H1 2017 with South Africa being the prime exporter. There has been a decrease of 23% Y-o-Y in South African exports to EU.

During H1 2017, The United States recorded an increase of 32% Y-o-Y in its Ferro Chrome imports. Exports from South Africa remained 31% high on Y-o-Y basis followed by Kazakhstan and Turkey.

South Korea registered a marginal decrease of 5% Y-o-Y in its Ferro Chrome imports during H1 2017. South Africa remained the prime exporter, registered a decrease of 23% in its exports, followed by India which recorded an increase of 41% Y-o-Y in its exports.

A marginal decrease of 6% Y-o-Y has also been registered by Taiwan in its Ferro Chrome imports. South Africa being the prime exported recorded a decline of 12% in its exports to Taiwan, while surged by 37% Y-o-Y in case of Indian imports.