China: Chrome Ore Imports marginally down by 3% in Oct'19

According to the Customs statistics, the import of South African chrome ore in Oct totaled at 1.16 MnT, down by 0.08MnT or 6.45% from the level in Sep'19. The total export of South African chrome ore during Jan-Oct was 12.397 MnT, of which 919,000MT was exported to China in Oct accounting for 59.52% of the total in the same month and 497,500MT to Mozambique accounting for 32.22% of the Oct total.

Up until last Friday, the port inventory in South China reached 865,000MT, of which 730,000MT is stocked at Qinzhou port. Zhanjiang port holds around 70,000 MT. Most of the stock is alloy plant owned and, at the rate of ore consumption, the port inventory can cover the demand of alloy plants in the vicinity for 5 months. However, the market may find a bright side by comparing the total port inventory over the last four weeks, which respectively showing 3.363MnT on Nov 15, 3.48 MnT on Nov 22, 3.46MnT on Nov 29 and today 3.315MnT.

At present, the market in South China is more passive than that of the North with inactive offers and buying inquiries, and transactions are few even at low prices. What's hampering the chrome market the most is not the price but demand from downstream. It is believed that port inventory in the South is unlikely to run down and transactions are hard to see a turning point in the short time to come. Affected by the decline in alloy prices, alloy plants in the South are experiencing serious problems in costs. Though there are some mills managed to keep operation, they are reliant on their own stock and may consider shutdown or go for production limit to offset higher costs over market prices and slow-paced sales.

There is no change in either domestic or oversea offers for chrome ore. The retail price of HC ferrochrome continued slip of RMB100/ 50 basis per ton. To cope with this, alloy plants will resort to divert this cost burden to chrome sellers and chrome ore prices may find hard to stabilize. It is heard that future supply of South African concentrates 40-42% will undergo another reduction of USD 5 /dmtu.