China: Ferro chrome prices fall w-o-w amid reduced operations in steel mills, sluggish demand

• Global, domestic chrome ore prices subdued

  
  
  

• Steel market remains weak amid low demand
  
  

CBC: China's ferro chrome prices declined by RMB 150/tonne (t) ($21/t) w-o-w, amid subdued demand. Southern steel mills reduced operations, and steel production was not able to fulfil demand. As a result, trades were sluggish, with reduced supply and underperforming demand.

Prices

High-carbon ferro chrome: Prices were largely stable w-o-w at RMB 7,300-7,700/t ($1,004-1,059/t), edging down by RMB 200/t ($28/t).

Medium-carbon ferro chrome: Prices dropped by RMB 100/t ($14/t) w-o-w to RMB 12,300-12,500/t ($1,692-1,719/t) exw, including taxes.

Factors driving market

Chrome ore market remains dull: The chrome ore market remained weak, with domestic spot prices fluctuating within a narrow range. Futures prices in Turkiye, Albania, Iran, Zimbabwe, and Pakistan also remained subdued.

The ongoing weakness in the downstream ferro chrome market has exerted pressure on chrome ore prices. Despite supportive sentiments from futures and spot traders, the market downturn appears difficult to reverse. Additionally, traders resorted to discounted sales, amid capital turnover pressures and expectations of future price declines.

Downstream demand declines: The stainless steel market initially benefitted from domestic quantitative easing policies, leading to a short-term rise. However, the underlying issue of supply-demand imbalance persists, and weak buying interest continues to weigh on the market.

With sluggish downstream demand expected till the end of the year, reducing supply remains the only viable option for producers. This persistent weakness in the stainless steel market is expected to eventually affect the mining sector, as lower demand and prices will filter through the supply chain.

Outlook

The ferro chrome market is expected to remain relatively stable in the short term, with minor fluctuations. Steel mill bidding will influence market dynamics, while caution from traders and steady inventories of ferro chrome and chrome ore suggest limited immediate impact.