China: Chrome Ore market remains in Downturn, amid lack of Interest

Today, the prices of chrome ore in both China and overseas markets remained unchanged. Although the spot transaction improved in the last week, it was still mainly featured with small batches at low prices. The main reasons behind it were:

1. It was impacted by the price decline in the retail HC Ferro Chrome market in China.
2. Alloy factories are prone to demand improving price of chrome ore
3. the outlook towards later development of HC ferrochrome is downcast and price decline did not successfully light up procurement willingness amongst waiting sentiments.
4. The high inventory and transaction problems in the terminal market.

Recently, the spot price of chrome ore has been weak. Facing with the sluggish purchase from downstream, although reluctant to downturn price, a few sellers holding cargo for quite some time have to reduce price due to capital strain, though knowing that such move may not boost up buying interests in a downside market with few inquiries. Meanwhile, most sellers who weathered through ups and downs are calmly positioned to see the market run its course, leading to price disparity.

At present, the spot price of chrome ore is in the consolidation stage. Although many stainless steel mills marked up the HC ferrochrome prices for October, the raw material purchases by alloy plants are still off the agenda due to the weakening price of retail ferrochrome, which echoes with downside trend of chrome ore. With the new round of tenders coming close, Ferro Chrome plants would not gladly accept marginally lower Chrome ore price from some sellers, who have been finding it difficult to sell but rather make use of the chance to press it down further, because of inactive inquiries from Ferro Chrome dealers. The unstable price of chrome ore and Ferro Chrome lead to cautious stances of both factories and traders.

The high inventory and transaction problems in the finished product market have become one of the most worrying issues for the chrome industry. Dragged by the stainless steel and ferrochrome market, the sluggish atmosphere in the chrome ore market is unlikely to pass in the short-term amid the lack of confidence among industry participants. However, considering that the profit in alloy production is still viable, there will be no production shutdown on large scale and the high operating will be supporting element for the limited scope of downside in chrome ore price.