China: Prices of Chrome Ore Gets Support over Anticipation of Supply Shortage

As the global market still reels from the spread of covid19, China's Chrome market showed signs of resilience and rebound out of the anticipation of disruption in Chrome ore supply following the lockdown for three consecutive weeks in the major producing countries such as South Africa and Zimbabwe.

Market participants are more willing to back up spot cargo price, due to the long down-trending market and the anticipation of supply disruption soon.

Previously, the sales pressure on stainless steel has been passed to alloy and in turn to chrome ore after the spring festival. But following the contingency measures taken by supplying countries, both chrome ore and alloy price grew strong with today's South African concentrates gaining RMB1/dmtu and retail price of HC Ferro Chrome up RMB 100-150 (USD 14-21) /50 basis per MT and LC Ferro Chrome/ultra-low Ferro Chrome up RMB 200 (USD 28) /60 basis per MT.

Offers on the market:
1. Chrome ore: South African 40-42% chrome ore concentrates at RMB 28-30 (USD 4-4.23)/dmtu, up by RMB2/dmtu; South African 42-44% concentrates at RMB 30-31/dmtu (USD 4.23-4.37/dmtu), up RMB1/dmtu; Turkey concentrates at RMB 38-38.5/dmtu (up RMB1/dmtu on Mar26).
2. HC Ferro Chrome: Inner Mongolia area at RMB 5650-5,750; Southwest at RMB 5,950-6,100; East China at RMB 6,100-6,200 (USD 859-873) (50 basis,ex-factory). Meanwhile, some factories halted offers on the expectation of further upswing.

Citic pacific confirmed its HC Ferro Chrome tender price for April at RMB6,250-6,380/50 basis per MT (acceptance, delivered, tax inclusive), up by RMB 100-180/50 basis per MT M-o-M with purchase amount 3,760 MT; LC Ferro Chrome at RMB 10,700-10,800/60 basis per MT (acceptance, delivered, tax inclusive), flat with last month level with purchase quantity 2,660 MT.

Till now, stainless steel mills understood moves to hike alloy price but are still conservative to accept high offers considering its own sales dilemma.

Transactions concluded today on chrome ore at Tianjin port:
South African Chrome ore ROM 37% at RMB30/dmtu for 1000MT
South African Chrome ore ROM40% at RMB32/dmtu for 1500MT
South African Chrome ore concentrates 44% at RMB31/dmtu for 1000MT