China: Ferro Chrome Prices Rebounds with recovery in Stainless Steel

Active Stainless Steel market has lent support to higher Ferro Chrome prices. Moreover, with diminishing inventory, the oversupply situation of Chinese Ferro Chrome market has witnessed a major change.

Some factories in south China, such as Hunan, Guizhou and Sichuan provinces, due to relatively high production costs, had to go for maintenance which can also be considered as a hedge against previous loss.

Additionally, the rising prices of raw material (Chrome Ore and coke) also encouraged the producers to maintain their current levels and quote higher. While a source claimed that some to the producers have stopped offering as well in view of higher prices in the coming days.

The latest transactions reveal that the mainstream offer for HC Ferro Chrome is still firmly between RMB 6800-6900/MT (USD 990-1004/MT) 50% Cr basis with some small and medium-sized factories offering ex-factory RMB 7000/MT (USD 1019/MT) 50% Cr basis.

The Chrome Ore price at Chinese ports remains unaltered irrespective of minor fluctuations in overseas offers.

The stainless steel market in China was witnessed to be very active post the announcement of 304 hot rolled strips by Tsingshan group and Yongjin stainless steel at RMB 15,300/MT (USD 2,227/MT) for October delivery. A source claimed that some big agent reportedly ordered as much as 10,000 MT while others who did not order later came to regret their decision. It is reported that when the futures price by Yongjin was offered at RMB 15,300/MT, the futures price by Hong Wang was even as low as RMB 15,200/MT (USD 2212/MT).

On the D-o-D basis, the price of the commodity increased from RMB15300-15400/MT (USD 2,227-2,241/MT) to as high as RMB15,600/MT (USD 2270) for cold-rolled sheet 304. Mills like Hongwang and Chengde's offer also reached RMB15,500/MT (USD 2,256/MT), though deals concluded could not be confirmed from company sources. Also, at Wuxi market, prices of 304, also went up by RMB 50/MT (USD 7.28/MT).

Moving forward, market participants are taking a bullish stance on the Ferro Chrome prices in China, and paying close attention to Chrome Ore inventory on ports along with the demand-supply dynamics while keeping the environmental concern in focus.