China: Ferro chrome prices remain steady w-o-w amid stable market fundamentals

• FeCr suppliers focus on fulfilling orders this week
  
  
• Cost pressures support prices amid weak demand

  
  
  

China's ferro chrome segment was largely steady, marked by lack of significant movements in market fundamentals. Most steel mills had finalised their purchases earlier, and ferro chrome suppliers focused on fulfilling their orders this week.

Despite limited demand and unfavourable market conditions, cost pressures supported the stability in prices. Accordingly, suppliers were reluctant to reduce prices significantly. This led to bid-offer disparities, with protracted price negotiations, which kept tags unchanged w-o-w.

Prices

High-carbon ferro chrome: Prices were unaltered w-o-w at RMB 7,900-8,300/t ($1,107-1,163/t).

Medium-carbon ferro chrome: Prices edged down w-o-w by RMB 100/t ($14/t) to RMB 12,800-13,000/t ($1,794-1,822/t) exw, including taxes.

Factors driving market

Chrome ore prices steady despite oversupply: The chrome ore market saw stable prices across various grades. The steady depreciation of the yuan against the US dollar propped up domestic spot prices.

Chrome ore purchases were driven primarily by need-based procurement. Weak demand contributed to oversupply, leading downstream steel mills to exert price pressure on suppliers. Amid this year's low chrome ore prices, the industry maintains a bearish outlook for the future.

Stainless steel market faces weak demand: The domestic quantitative easing policy initially boosted the steel market, but underlying weaknesses have come to the fore again. Persistent weak demand has forced mills to reduce output.

No significant improvement in downstream demand is expected for Q4, meaning price pressures will likely continue and impact the mining sector as well. This negative cycle suggests that supply adjustments will be needed soon, which will weigh down on the ferro chrome market.

Market outlook

Presently, steel mills have been slow to bid for high-carbon ferro chrome, with cautious traders reluctant to stock up amid unclear demand. Market attention remains on the progress of steel bidding and fluctuations in the stainless steel market.