China: Ferro chrome prices edge down w-o-w amid weak stainless steel demand

• Chrome ore prices decline on weak downstream demand
  
  
• Stainless steel price pressures may persist till year-end
  
  

CBC: China's ferro chrome market showed a downward trend, with prices inching down by RMB 150/tonne ($21/t).

The supply side faced a downturn, as southern steel mills have reduced their operations, and on the demand side, stainless steel production has also failed to meet expectations. This has led to insufficient market activity, creating a weak trading atmosphere.

Prices

High-carbon ferro chrome: Prices were largely stable w-o-w at RMB 7,500-7,900/t ($1,034-1,089/t) edging down by RMB 100/t ($14/t).

Medium-carbon ferro chrome: Prices dropped by RMB 200/t ($28/t) to RMB 12,400-12,600/t ($1,710-1,737/t) exw, including taxes.

Factors driving market

Chrome ore prices decline amid weak sentiments: The chrome ore market remained weak, with domestic spot prices fluctuating within a narrow range. Foreign futures prices, in countries like Turkiye, Albania, Iran, Zimbabwe, and Pakistan, also experienced weakness.

The ongoing downturn in the downstream ferro chrome market continues to pressure chrome ore raw material prices. Despite price-supporting sentiment from traders, the market's overall decline persists. Facing capital turnover pressures and potential future price declines, traders are selling at discounted prices to mitigate risks.

Stainless steel struggles amid demand imbalance: The steel market experienced an initial boost from domestic quantitative easing policies, but the core issue of supply-demand imbalance remains. Demand continues to be sluggish, leading to a negative market sentiment. As a result, the supply side is expected to reduce output to cope with the market conditions.

With no substantial improvement in downstream demand anticipated by the year's end, price pressures will persist. These challenges are expected to impact the mining sector, potentially exacerbating the ongoing market weakness.

Outlook

The ferro chrome market is expected to remain weak with minor fluctuations, influenced by slow steel mill bidding, cautious trading, and subdued downstream demand. Continued attention to steel bidding progress and stainless steel market trends is crucial for future market direction.