China: Ferro Chrome Prices Goes Down Amid Bearish Market Sentiments

With the decline in the tender price of high-carbon Ferro Chrome by the downstream large steel mills in June, Tisco and Tsingshan Holding Group among others have down-turned RMB 350(USD50.62) / 50 basis per MT compared with last round. The price of chrome ore both inside China and in the overseas market continued to fall at the beginning of the week. Although some port spot holders said that the current shipments are already in a state of running loss, transactions at low prices are constantly on show.

Up to now, according to a trader source in China, FOB price at port for 40-42% concentrates of RSA is offered at RMB29-31/dmtu (USD 4.19-4.48/dmtu) tax inclusive; 42-44% concentrates from RSA offered at RMB32-34/dmtu (USD 4.63-4.92/dmtu), 46- 48% concentrates of Turkey origin is at RMB43-45/dmtu (USD 6.22-6.51/dmtu), 40-42% lumpy of Pakistan and Turkey origin is at RMB44-46/dmtu(USD 6.36-6.65/dmtu). Compared with not long before, chrome concentrates of RSA once again lowered by RMB1/dmtu(USD 0.14/dmtu) Since the mid-April, when it began to decline till now, posting a cumulative decline of RMB4/dmtu(USD 0.58/dmtu).

At the same time, overseas offers are also showing a downward trend step by step, with 40-42%% bulk concentrates of RSA CIF China main port offered at USD155-160 / ton, 42-44%% bulk concentrates of RSA CIF China main port offered at USD175-180 / ton, 46-48% concentrate of Turkey CIF China main port offered at USD 235-245 / ton, 40-42% Turkish chrome ore CIF China main port offered at USD205-215 / ton. According to some importers, the actual transactional price of RSA concentrates can go lower by USD 2-3 / ton.

In the downstream Ferro Chrome market, the tender price of high-carbon Ferro Chrome by Tisco in June 2019, which is RMB6,550 (USD 947.37/MT) /50 basis per tonne, cash, tax inclusive, delivered with regular purchase quantity, marking a RMB 350 (USD 50.62)/50 basis per ton lower than the price in May. Today Tsingshan Holding Group and Baosteel announced the tender price of high-carbon Ferro Chrome in June 2019, which is RMB 6,746 (USD975.42) and RMB6,750 (USD976.29)/50 basis per ton, cash, tax inclusive, delivered, marking RMB 350 /50 basis per ton lower than that in May. For port spot, the price is RMB 6,606 (USD 955.47) /50 basis per ton, cash, tax inclusive with routine purchase quantity.

As the tender prices from both the North and South Steel mills (represented by Tisco BaoSteel and Tsingshan) have set a tone of RMB350 (USD 50.62) / 50 basis per ton of decrease, which falls within expected range, the imbalance between supply and demand of high-carbon Ferro Chrome market in the short-term needs to be adjusted, and the listless market may find difficult to improve. In addition, the high inventory of chrome ore at China's ports is also a major reason for the downward price of chrome ore. Many of the mineral holders are under "mountain-like pressure", within the context of the continuous downside of Ferro Alloy market. Many hold negative perspectives towards the latter development, and mills are wary about the purchase or demand for a lower price when doing so. The downward trend of chrome ore and ferro chrome price in the short term is through hard to turn around.