China: Ferro chrome prices remain stable w-o-w; supply-demand imbalance persists

Slightly improved demand from the downstream sectors kept the Chinese ferro chrome sector stable. However, even with declining costs, industry confidence remained moderate due to the ongoing supply-demand imbalance. Steel mills retain bargaining power in this oversupplied market, limiting price increases and overall market optimism.

Grade-wise prices

High-carbon ferro chrome prices inch down: Prices were largely stable with a slight downward correction of RMB 100/tonne (t) ($14/t) seen w-o-w. Prices reached RMB 7,900-8,300/t ($1,108-1,165/t).

Medium-carbon ferro chrome prices dip: Prices of medium-carbon ferro chrome also edged down w-o-w by RMB 100/t ($14/t) at RMB 12,900-13,100/t ($1,810-1,838/t) exw, including taxes.

Chrome ore prices remain stable, but outlook bleak: The chrome ore market remained stable, with no changes in prices. The ferro chrome market remained largely stable, but demand for chrome ore remains limited. Oversupply issues persist, with steel mills continuing to exert price pressure on suppliers. Despite chrome ore prices being low this year, the near-term industry outlook remains pessimistic.

Steel market struggles amid weak demand: The steel market initially benefited from domestic quantitative easing policies, leading to some early gains. However, the underlying weakness remains, with persistent supply-demand imbalances. In the current environment of low demand, the supply side's only response is to cut production. Expectations for the fourth quarter suggest no significant improvement in downstream demand, leading to ongoing price pressure that will ultimately affect the mining sector.

Outlook

Ferro chrome market outlook remains cautious, with a feeling of hesitation being pervasive among traders. Stability is expected as market participants closely monitor the fluctuations in the downstream stainless steel market.