China: Tsingshan Group rolls over Ferro Chrome Purchase Price for April

Tsingshan Group, China's and the world's largest stainless producer, has announced that for its purchases of HC Ferro Chrome in April, it has decided to maintain the same buying price as for March of Yuan 5,647/MT (USD828.8/MT) including 13% VAT in terms of delivery to its plant, according to a company notice posted late on March 26. For this month's procurement, Tsingshan pared its bid price by Yuan 150/MT, as Mysteel reported.

A Shanghai-based market insider considered it significant that Tsingshan had revealed its monthly pricing policy several days earlier than usual, and that the mill was keeping its bid level unchanged. She suggested the stainless giant was aiming to reassure domestic Ferro Chrome smelters who are currently concerned about tightening supplies of imported chrome ore amid the outbreak of COVID-19 overseas. "The possible tight supplies will definitely increase the smelters' raw material costs," she told Mysteel Global.

South Africa, a top Chrome ore and Ferro Chrome provider to China, is now observing a nationwide lockdown over March 26-April 16 for combating the spread of the virus, with many mines and ports signaling their intention to obey the shutdown, as Mysteel Global reported.

China's imports of chrome ore and Ferro Chrome from South Africa over January-February reached 2.1 MnT and 278,718MT respectively, accounting for 86.7% and 59.5% of China's total imports of these commodities, according to the General Administration of Customs data.

Moreover, operations of ports in Mozambique near South Africa are also showing signs of disruption through the virus, Mysteel learnt from the market. Ports such as Maputo are key shipping ports for chrome ore from South Africa and Zimbabwe destined for China, while ports in other countries that usually export chrome materials to China such as those in India and Turkey could also be subject to similar nationwide lockdowns should the virus contagion worsen.

As of March 26, the world had 462,684 confirmed COVID-19 cases, 120% higher on week, according to the latest situation report from the World Health Organization.

Thus, for April Tsingshan evidently decided to buy domestic Ferro Chrome rather than imported Ferro Chrome, given the possible decrease in supplies from overseas under the severe COVID-19 situation, the Shanghai's insider said. "And the company has decided to keep its procurement price unchanged - rather than continuing to cut because of the sluggish stainless market - in order to give the domestic Ferro Chrome smelters space to digest the higher-priced imported chrome ore," she added.

Landed prices in China of chrome have rebounded since March 23, with that for South Africa-origin 42% grade chrome concentrates at Tianjin port of North China, for example, reversing up from its 47-month low to Yuan 27.25/dmtu as of March 26, higher by Yuan 3.5/dmtu on week, Mysteel's data showed.

(This article has been published under the article exchange agreement between SteelMint Research and Mysteel Global.)