Chinese ferro chrome prices inch down on volatile market dynamics

Ferro chrome prices in China dropped a little this week as buyers and sellers haggled aggressively. High-carbon ferro chrome prices remained generally unchanged, with a modest decline of RMB 50/t ($7/t) to RMB 8,550-8,750/t ($1,189-1,217/t), while medium-carbon prices fell by RMB 100/t ($14/t) to RMB 14,100-14,200/t ($1,961-1,975/t). All prices include tax and ex-works.

Factors affecting Chinese ferro chrome prices:

Disparity between seller, buyer expectations: The market seemed to be facing a dilemma of "high or low," with sellers hesitant to reduce prices significantly while buyers are resistant to high-priced resources. This situation led to a stalemate in the ferro chrome market and hence lowering the prices.

Restricted acceptance of high offerings of chrome ore: The recent price increase in the chrome ore futures market has led to a rising mentality among spot traders, but downstream acceptance of high-priced ores remained limited due to the lack of significant increase in purchasing power on the demand side. As a result, the actual trading volume of chrome ore stayed lacklustre.

Sluggish downstream demand: The sluggish downstream demand and lowered bidding prices from steel mills have contributed to the loosening of retail bulk transaction prices. However, the improvement in Shanghai nickel and stainless-steel futures, even if not significant, helped in boosting market confidence.

Merchants managed their inventory conservatively based on specific needs. Monitoring changing dynamics will be crucial for making informed decisions in the market.

Outlook

It is anticipated that the ferro chrome prices would remain stable in the short term. It's important to monitor the changing trends closely to understand the market dynamics and make informed decisions.

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