China's ferro chrome market drops amid weak trade flow

The price of high-carbon ferro chrome dropped this week at around RMB 9,050-9,250/t ($1238-$1266/t) including tax, with an average price of RMB 9,150/t ($1252/t).

Whereas, the price of medium carbon ferro chrome stayed stable with RMB 14,700-14,800/t ($2012-$2025/t) including tax, with an average price of RMB 14,750/t ($2019/t).

The ferro chrome market remained dull with weak trading atmosphere and declined actual trading volume. Some steel mills have offered lower prices than expected in their bids. This has caused a big difference between the bidding price and the market retail price, resulting in a slight drop in the price of high-carbon ferro chrome.

The chrome ore market stayed firm with sound trading atmosphere and steady trade volumes. The supply of chrome ore from South Africa has been affected by shipping inefficiencies and power cuts, resulted in a relatively small supply at the port. Traders are holding up prices due to this supply difficulty.

Meanwhile, the stainless steel market remained flat with average trading atmosphere. Although the stainless steel futures market fluctuated, the coil market showed a cost inversion phenomenon. Traders are not willing to lower prices due to the high cost of holding goods, resulted in relatively firm prices.

Overall, the market price of ferro chrome raw materials remained high, and the price of auxiliary materials also rose. This has increased the cost for ferro chrome manufacturers and squeezed their profit margins. The market expects a rise in prices.

However, the increase in bidding prices by steel mills in September did not meet expectations, and downstream steel mills are not accepting high-priced ferro chrome.

Outlook

It is anticipated that the ferro chrome market will stabilize in the short term and focus on consolidation and operation.

Note: This article has been written in accordance with an agreement between CBC and SteelMint.