China's ferro chrome prices increase on as steel mills replenish stainless-steel stocks

On 15 August, cash market quotes for China's micro-carbon ferro chrome (Cr: 60%; C: 0.1%) rose to RMB 14,700-14,900/t ($2,015-2,043/t), with an average price of RMB 14,800/t ($2,029/t), up RMB 100/t ($14/t) from 14 August.

The ferro chrome market looked positive, the trading environment was generally favourable, and actual transaction volume was consistent. Medium, low, micro-carbon, and high-carbon ferro chrome all witnessed an RMB 100/t price hike. As the delivery date of the steel mills' long-term co-operation contracts approached, mills were largely providing long-term orders, and the market had limited retail resources. While downstream stainless-steel output remained consistent in August, several steel mills were eager to replenish their stocks.

The market for chrome ore likewise showed a steady trend with a positive trading environment, and an increase in real trade volume. Traders essentially had no plans to make price concessions because the market for chrome ore was quite constrained and spot resources were concentrated to a high degree. Downstream ferro chrome plants, on the other hand, were dealing with rigid stockpiling demand, and queries had been particularly busy lately, with the majority of them asking for spot supplies. When there was less supply than there was demand, dealers provided definite quotes.

Additionally, the downstream stainless steel markets showed an average trading environment and volume. The most recent market pricing for the 200 and 300 series were mostly adjusted steadily. Additionally, as a result of the recent subpar performance of market transactions, merchants in some places had undertaken minor profitable ventures to encourage transactions. Downstream merchants were largely sitting on the sidelines and actual orders were slow due to the uncertain market.

Outlook

Overall, the price of ferro chrome raw materials remained high, as did the price of auxiliary components. The cost of producing ferro chrome was considerable, decreasing the profit margins. On the other hand, in order to retain capital, mills were willing to hike prices even while steel bid prices fell. The ferro chrome market is expected to demonstrate a robust and stable trend in the near future, while changes in raw material costs and purchasing moods must be closely monitored.

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