China: Ferro chrome market inches up amid buoyant sentiments

HC ferro chrome market maintained the positive development and participants are still holding intense willingness to prop up alloy price under the support of high yield stainless steel and rigid production costs driven by firm chrome ore prices. The outlook on tender price for October is positive.

HC ferro chrome prices inched up slightly backed by limited supply on the spot market and few stocks inside plants, leading to some plants' holding back offers on expectation of better prices. Currently, the mainstream price of ferro chrome (HC 50 %) is around RMB 6,000-6,100/t ($886-901/t). Specifically, price (delivered including tax) in Hebei area is RMB 6,125 ($ 905/t), Shandong area at RMB 6,213 ($ 918/t), Liaoning area at RMB 6,333 ($ 936/t), Jiangsu area at RMB 6,389 ($944/t); Sichuan area at RMB 6,426 ($949/t), Hunan area at RMB 6,480 ($957/t);

Chrome ore market remain stable
At present, the chrome ore market firmed up on the back of high level of stainless-steel output and the vehement willingness from alloy producers to see price uptick culminating in reasonable support on chrome ore demand and prices. Chrome ore traders are optimistic about later market and chrome ore market in the short term is thought to be stable without notable changes.

Tianjin port inventory: the chrome ore inventory as tallied by Zhenhong international logistics by Sept 18 was at 2.93 mn t, up 44,829t, (ferroalloy at 2.503 mn t down 4,600 t w-o-w).

Price:

Stainless steel market remains firm
The weak momentum sticks to stainless steel (SS) market with no notable fluctuation on the whole. At present, four feet cold rolled 304SS of untrimmed edge in Wuxi and Foshan areas are offered at RMB 13,850-14,500/t ($ 2,046-2,142/t) with some specifications in Foshan spotted as low as RMB 13,800/t ($ 2,039/t) whereas the ss of untrimmed edge in Wuxi is maintained at RMB 14,100/t ($ 2,083/t). SS board price is comparably better than coils in price rigidity. On the other hand, hot rolled 304SS board is also on the downhill at slow pace with mainstream offers in Foshan and Wuxi at RMB14,100-14,300/t ($2,083-2,113/t) for untrimmed edge SS. Currently the market is filled with cautious sentiments where some sellers plan to reduce stock to get cash return.

Summary:
Blunted by the tepid market, stainless steel continued to weaken recently with some even expecting imminent loss. The chrome market should consider the negative impact brought by the ss market. For the moment, there is no apparent fluctuations in ferro chrome market but focus needs to be put on the dynamics of supply and demand in the short time to come.