China: Will Ferro Chrome Market experience a turnaround?

Inner Mongolia is heard to observe power-limit, and could provide the Ferro Chrome market a revival opportunity.

After the release of new round of tender prices successively by iconic mills such as Tisco, Baosteel and Tsingshan group etc, the market direction is clearer - guiding other mills to purchase in line with the set benchmark price and market trading to take off. But, the actual performance is not as optimistic as expected as traders were actively looking to clear out stock to get cash. According to the latest information, the mainstream price on the market is still around RMB 6,600/ 50 basis per tonne. However, what is significant to note is that there is news of power-cut in inner Mongolia in order to ensure power usage in Beijing (some 10 hours power-cut each day), resulting in adverse impact on output.

Stainless steel: stable

The minor increase of 201 cold rolled coil has caught the market's attention but 304 is still stable, though there were downward adjustment by individuals. The 304 cold rolled coils in Wuxi market is offered at RMB 14,700-14,900/tonne for those from mills such as ZPSS,Tisco and Jisco while those from Hongwang,Chengde and Yongjin mills were offered at RMB 14,000-14,200/tonne for uncut edge, which compared with prior to the holidays decreased slightly by RMB 50/tonne. The reference price of ESS (Eastern Special Steel) adjusted downwards to RMB13,500/tonne, down RMB 50 and market offer in the morning was RMB 13,400-13,700/ton; the offer for Tsingshan hot rolled coil is at RMB 13,400-13,450/tonne.

Future Outlook

In the absence of support by obvious positive information , HC Ferro Chrome market in China may continue to operate weakly in the short-term. As for the future trend, it is necessary to pay close attention to the changes in supply-demand dynamics and the operation situation in Inner Mongolia.