China: Ferro Chrome Prices Unlikely to See Significant Fluctuations

Ferro Chrome price in China is expected to be range-bound, with marginal changes in the short term.

On one hand, the South African chrome ore suppliers have been witnessing strong demand, and Chrome Ore prices have begun to increase gradually. On the other hand, the domestic chrome ore stock at main ports was greatly consumed in September by the factory for their stocking up before the mid-autumn festival and National Day holidays, hence the traders are holding a positive outlook. Under the support of multiple favorable factors, after a period of stable operation, the price of South African chrome ore futures today is up by USD 5/MT, and the price of non-mainstream chrome ore futures is up by USD 10/MT.

Considering chrome ore and Ferro Chrome prices are closely correlated, the increase in the quotation of chrome ore will be accepted by the market and the domestic port price increases, then it is expected to form the favorable support for the HC Ferro Chrome market. In addition, tender prices for October by mainstream steel mills have increased RMB 300/MT (USD 43/MT) 50 basis. However, new orders after the tendered quantity are quite low. Under such circumstances, the HC Ferro Chrome price might continue to be stable in the short-term. The latest statistics show that the mainstream market price is still between RMB 7,000-7,200/MT (USD 1012-1041/MT).

On October 10, the alloy index price for HC Ferro Chrome RMB 7,194/MT (USD 1040/MT) in Hebei; RMB 7,274/MT (USD 1052/MT) in Shandong; RMB 7,503/MT (1085/MT) in Liaoning; RMB 7,421/MT (1073/MT) in Jiangsu; RMB 7,426/MT (USD 1074/MT) in Sichuan; RMB 7,470/MT (USD 1080/MT) in Hunan ; LC Ferro Chrome 60 basis (delivered, tax incl.) : RMB 12,895/MT (USD 1865/MT) in Hebei ; RMB12,993/MT (USD 1879/MT) in Shandong; RMB 13,113/MT (USD 1896/MT) in Liaoning ; RMB 13,131/MT (USD 1899/MT) in Jiangsu; RMB 13,154/MT (USD 1902/MT) in Sichuan.

Stainless Steel Market Edges Up

The 304 series cold rolled coils and the trend for LME Nickel has turned positive. The market ushered in a reversal to see hot rolled coils prices rebounding by RMB 50/MT (USD 7.23/MT) by some agents. LME nickel was up USD 305 at closing yesterday and this morning both 304 cold and hot rolled coils began to embark on an upswing track.

In Wuxi market, the commodities produced by state-owned companies from Zhangpu, Jiugang, and Tisco generally have risen by RMB 50/MT (USD 7.23/MT), while those produced by private companies saw a larger increase, with some agents breaking the long-lasting quietness to directly raise prices by RMB 100/MT (USD 14.5/MT).

Cold rolled coils from private companies like Hongwang, Chengde, and Yongjin are quoted at RMB 15,550-15,700/MT (USD 2249-2270/MT). Hot rolled coils are up by RMB 50/MT (USD 7.23/MT) in the afternoon yesterday and continue to increase RMB 50/MT (USD 7.23/MT) today. Those produced by Chengde, Dongte, and Delong have reached RMB 15,000/MT (USD 2169/MT). In Foshan market, cold rolled coils by private companies also rose rapidly by RMB 100/MT (USD 14.5/MT), to RMB 15700/MT (USD 2270/MT).

Future Outlook

On the future outlook, the HC Ferro Chrome market may continue to operate strongly. However, traders are active to generate sales due to the moderate transaction on new orders while buyers demand lower prices. At the same time, SteelMint learned that blast furnace of one mill in Fujian province that produces 200 series stainless steel is set for maintenance in mid-October. however, with the interwoven positive and negative information, the market trend it is yet to be verified by time.