China: Ferro chrome prices remain under pressure amid weak demand

The ferro chrome market witnessed a downtrend this week on poor demand amid oversupply. Prices of the various grades were as follows:

High-carbon ferro chrome: Prices were at RMB 8,850-9,050/t ($1,216-1,243/t), remained unchanged w-o-w.

Medium-carbon ferro chrome: However, prices for medium-carbon ferro chrome diminished by RMB 300/t(41/t) w-o-w and hovered at RMB 13,800-14,000/t ($1,897-1,924/t). All prices are ex-works and include taxes.

Ferro chrome market declines amid oversupply: The ferro chrome market witnessed a slight decline w-o-w with a subdued trading atmosphere. High-carbon ferro chrome prices remained stable, while medium-carbon ferro chrome prices fell marginally. On the other hand, chrome ore prices stayed high, leading to elevated production costs for ferro chrome plants. Despite efforts to support prices, oversupply has weakened ferro chrome prices.

Chrome ore market stalemate: The chrome ore market functioned steadily with a generally moderate trading atmosphere. Despite miners maintained higher quotations, downstream buyers were resistant to the high prices, primarily purchasing for essential needs.

The market remained in a stalemate, with a noticeable wait-and-see sentiment prevailing. This dynamic reflected the ongoing cautious approach within the industrial chain, where both supply and demand sides are engaged in a strategic game.

Stainless steel market remains cautious: The downstream stainless steel market also remained steady and a general trading atmosphere prevailed. Terminal demand remained weak, and downstream merchants adopted a wait-and-see approach, increasing risk aversion.

Most transactions were driven by rigid demand. Declines in Shanghai nickel and stainless steel prices have made downstream merchants bearish on the future market, leading to postponed purchases. Traders note that the market is in a bargaining phase, with price stability crucial for maintaining market confidence.

Outlook:

Ferrochrome prices are expected to remain stable in the short term due to high raw material costs, production cuts, and persistent supply-demand mismatches amid weak retail sentiment and off-season conditions.

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