Chinese ferro chrome prices inch up post-festival amid high costs

The ferro chrome market performed strongly this week, with an average trading atmosphere. Post-Dragon Boat Festival, the domestic market bloomed positively. High raw chrome ore prices, driven by increased futures, pushed spot traders to raise prices.

Prices of various grades were:

High-carbon ferro chrome: Prices were at RMB 8,950-9,150/t ($1,234-1,261/t) up by RMB 100/t ($14/t).

Medium-carbon ferro chrome: Prices hovered at RMB 14,000-14,100/t ($1,930-1,944/t), inching up by RMB 100/t ($14/t). All prices are ex-works and include taxes.

Market driving factors were:

Hight cost of production: Ferro chrome manufacturers, faced high costs, and were keen to maintain strong prices. Additionally, reports of ferro chrome storage research further anticipated rise in prices.

Chrome ore market in a stalemate: Recently, the price of foreign chrome ore futures was raised again, leading to a gradual rise in the downstream ferro chrome market, which provided robust support for port spot market prices.

Despite the firmness in miners' quotations, the downstream market remained reluctant to accept high prices, resulted in limited high-priced transactions. This stalemate within the industry chain reflected a cautious approach among stakeholders, as they navigate the complexities of pricing and demand.

Slow-paced stainless-steel market: The downstream stainless steel market showed minimal changes, with a generally average trading atmosphere. The stainless steel futures market underperformed, leading to a decline in trading confidence. Only a few high priced transactions were there that took place.

Despite a slight increase in inventory, traders feel significant pressure to ship goods. The slow progress of terminal projects further dampens the willingness of downstream merchants to make purchases, who primarily engage in inquiries and adopt a wait-and-see approach.

Outlook

The flat pricing in June's ferro chrome steel bids has exerted pressure on market improvement and the upcoming flood season in the southwest region may reduce electricity costs.

However, the recent rise in South African chrome ore futures maintains cost support. Despite this, the anticipated increase in production supply suggests limited upward momentum for ferro chrome prices. Consequently, it is expected that ferro chrome prices will likely remain stable in the short term.

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