Chinese ferro chrome prices remain largely stable on supply-demand imbalance

CBC: The ferro chrome market remained largely stable this week with high carbon ferro chrome segment that maintained consistency with unchanged prices. However, the medium experienced slight declines. Despite a brief period of stabilisation, these markets continue to fall due to supply-demand imbalance.

Additionally, steel mills' bidding and procurement prices have increased, yet actual transaction prices have decreased again. This ongoing fluctuation reflected the ongoing instability in the ferro chrome market.

Prices of various grades:

Firm high-carbon ferro chrome price: Prices were unchanged w-o-w to settle at RMB 8,400-8,800/t ($1,170-1,225/t).

Medium-carbon ferro chrome: Prices of medium-carbon ferro chrome inched down by RMB 100/t(14/t) w-o-w to RMB 13,200-13,400/t ($1,838-1,866/t). All prices are ex-works and include taxes.

Need-based procurement of raw material: The chrome ore market stayed steady with a general trading atmosphere and no significant fluctuations. Despite miners' firm quotations, downstream buyers were resistant towards high prices, purchasing primarily for essential needs.

The industrial chain remained in a stalemate, and there is a prevalent wait-and-see sentiment. This cautious approach reflects the current market dynamics, where buyers are hesitant to commit amid price firmness from suppliers.

Stainless steel inventory declines: As of 1 August, 2024, the total stainless steel inventory in the Wuxi market dropped to 654,000 t, with 304 cold-rolled steel at 329,000 t, a decrease of 112,400 t. This significant decline is due to reduced arrivals of 304 cold-rolled and hot-rolled steel this week.

In addition, market activity stimulated partial inventory digestion, and the conversion of some warehouse receipt resources to cash further reduced stocks. Consequently, the inventory of 304 cold-rolled steel decreased significantly.

Outlook

Downstream steel mills showed tepid stocking interest, with weak ferro chrome demand. High production costs prevent significant price cuts. Poor off-season demand and falling raw material costs undermine market support, risking further weak downtrends.

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