China: Ferro chrome market holds steady amid weak demand, oversupply
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- Stainless steel trends down
- Chrome ore remains stable
CBC: China's ferro chrome market remained largely stable, exhibiting no significant fluctuations amid a cool market atmosphere. Demand from the downstream sector remained weak, despite a decline in ferro chrome costs.
The industry was subdued, largely due to a persistent supply-demand imbalance. Steel mills hold bargaining power, with excess supply placing downward pressure on prices.
Prices of various grades
High-carbon ferro chrome prices inch down: Prices were largely stable with a slight downward correction of RMB 100/tonne (t) ($14/t) w-o-w to RMB 8,000-8,400/t ($1,124-1,181/t).
Medium-carbon ferro chrome holds steady: Prices of medium-carbon ferro chrome were unchanged w-o-w at RMB 13,000-13,200/t ($1,827-1,855/t) exw, including taxes.
Chrome ore market remains stable on supply concerns: The chrome ore market is currently stable, with prices remaining unchanged across grades. With the ferro chrome market no longer witnessing price reductions, chrome ore purchases have been driven primarily by rigid demand. An oversupply situation has emerged, which has impacted pricing dynamics, with steel mills exerting pressure that is being transmitted upstream.
Stainless steel market struggles amid supply-demand imbalance: Recent quantitative easing measures by the central bank initially provided a boost to the stainless steel market. However, a persistent supply-demand imbalance continues to pose challenges.
With weak demand expected to extend into the fourth quarter, producers may need to reduce supply to stabilise the market. This adjustment is likely to create upward pressure on chrome ore prices.
Outlook
Looking ahead, steel mills are proceeding cautiously with high-chrome bidding, and traders remain hesitant to stock up amid unclear demand signals. Market participants should monitor the developments in steel bidding and fluctuations in the stainless steel market. Overall, the ferro chrome market is likely to maintain stability in the short term.