China: Ferro Chrome Market Stable yet Weak
...
There are no alterations in domestic Ferro Chrome and imported Chrome Ore market prices.
As the Spring Festival is approaching and demand is weak, therefore, Ferro Chrome producers are careful about replenishing their inventories. Transactions in the port are minimal after the mills have completed stocking up for holidays. At this time, the trade volume of the Ferro Chrome plants is relatively small, which is mainly for stocking-up.
However, due to decaying demand in the market and the current difficult port transactions, producers are not optimistic about the market and are willing to clear out stock at concessional rates in exchange for cash back, which may loosen up the prices in the short-run. However, many traders are not willing to go for a rushed sale.
At present the most traded is the South Africa Concentrates. Price of South Africa concentrates 40-42% and 42-44% respectively stands at USD 155-160 / MT, and USD 175-180/ MT, while Turkey concentrates 46-48% are being offered at USD 230-235/ MT. At present, the total chrome ore stocks at the port are about 2.82 million tonnes. However, many low-priced ores will arrive later.
Demand from Chinese Domestic Ferro Chrome smelters remained low after restocking for use over the upcoming Chinese Spring festival starting from feb5. Meanwhile, production cuts in the Inner Mongolia region due to electricity limitations has made the producers wary about the replenishment of raw materials.
Some domestic offers on HC Ferro Chrome today: ex-factory including tax: Inner Mongolia at RMB6,600-6,700/ 50 basis per tonne, Sichuan at RMB6,800-6,900/ 50 basis per tonne, Jiangsu at RMB7,000-7,100 / 50 basis per tonne.
HC Ferro Chrome factories in Inner Mongolia successfully completed orders for steel mills with winter storage needs successively, which leaves a small amount for spot retail, though transactions are relatively weak. However, some mills have suffered by the electricity limit and have indicated their inability to complete orders by early February. After the end of this week, the upstream plants will also withhold their work until the holidays are over. This is also the reason for alloy factories to lose confidence over the market before the holidays as they are said to go with the market flow. Meanwhile nearing February Steel tenders, some industry participants believe that the probability of flat price is high.
On the future outlook, it is expected that the market will remain stable and won't fluctuate much before the New Year festival. Due to the large purchase volume this month, the steel mills will be more cautious about the purchase in February. Nevertheless, the market is expected to fully function around mid-Feb when the festivals are over with.
