China: Chrome Ore Prices Remain Unchanged W-O-W

From last week the overseas offers on chrome ore have not been adjusted. As to future deliverable South Africa's chrome ore, mainstream suppliers tend to markup offers after the release of tenders prices, a move in consideration of increased export costs resulted from climbing ocean freight and inland transport due to strikes amongst truck drivers, hence the future deliverables from RSA remain at a stable price. As to Turkey and Pakistan, foreign sellers are still optimistic, and the quotation remains at high positions. Some chrome ore suppliers hold bullish outlook in the market and choose to put sales on hold. However, the high price is not accepted by the Chinese market. There are no apparent changes in foreign offer reflecting wait-and-see mode taking shape. Today, the price of chrome ore both in China and oversea market remain unchanged. The retail price of ferrochrome is also stable. However, due to the recent tepid transactions of ferrochrome, the enthusiasm of chrome ore procurement by the factory is affected. The wait-and-see atmosphere is thick, and the chrome ore transactions are insufficient, though ore price is still relatively stable.

According to the feedback of some port chrome ore traders, some factories with real procurement plans before the release of the tender price have virtually suspended procurement following the released tender price. Recently, there have been few concrete purchases from downstream factories. Most of the inquiries received are mainly for getting price ideas, and the counter offers of some factories are way lower than the market prices. Therefore, the chrome ore market finds difficulty in transactions. As of September 6, the spot inventory of chrome ore at the port was 2.791 million tons, which was 91,000 tons more than the inventory (2.7 million tons) on August 30 (the number of unpacked containers and bonded warehouses at Tianjin Port was not counted). Most sellers at the port did not suffer much pressure on the funds nor on the sales. Meanwhile, due to factors such as the high cost of chrome ore, it is pointless to make a big concession even if the recent shipment is not smooth. The quotation level is still aligned with the previous one.

After the tender price of HC ferrochrome by mainstream large-scale stainless steel plants were finalized on last Thursday, the retail price of ferrochrome lacks enough support for the upswing, and the market trading atmosphere was also slightly deserted, leading to difficulty in ferrochrome sales. In addition, affected by increased costs in raw material and transport etc, alloy plant found their profits squeezed. The tender prices are so low that all alloy plants across China will run loss if they supply based on them. Under such circumstances, it is unwise for plants to procure ores in large volume. The temporarily stalled procurement plan, on the other hand, it also kind of psychological standoff, which to the seller serves as a measure to weaken ore price.

At present, both buyers and sellers in the China chrome market are locked in a stagnant state, with neither the plant nor factory are willing to compromise amid wait-and-see sentiments.