Chinese ferro chrome prices stable w-o-w as market sentiment remains cautious

The ferro chrome market showed consistency this week amid unchanged prices. The prices of the various grades were:

High-carbon ferro chrome: Prices were at RMB 8,950-9,150/t ($1,233-1,261/t).

Medium-carbon ferro chrome: Prices hovered at RMB 14,000-14,300/t ($1,929-1,971/t), All prices are ex-works and include taxes.

Factors driving market

High chrome ore prices challenge ferro chrome market dynamics: The cost of raw material, chrome ore, is high, and with rising chrome ore futures, spot traders are eager to increase prices. Ferrochrome manufacturers face high costs and are keen to maintain price levels. As per BigMint's assessment on 18 June, UG2 chrome ore (40-42%) prices were hovering at around USD320/t CNF China, while Turkish chrome ore (46-48%) prices were at $435/t CNF China.

However, the industry remains in a stalemate, and downstream companies are reluctant to accept high prices, showing weak purchasing enthusiasm, making high-price transactions challenging to achieve.

Stainless steel market shows consistency: The downstream stainless steel market maintained stable operations with a cautious trading atmosphere. Terminal demand showed no signs of improvement, prompting downstream merchants to adopt a wait-and-see stance amid heightened risk aversion.

Transactions predominantly revolve around essential needs. Decreases in Shanghai nickel and stainless steel prices have fostered bearish sentiment among downstream participants, leading to deferred purchases. Traders emphasise ongoing negotiations, highlighting that price stability is crucial for bolstering market confidence at this stage.

Outlook:

The ferro chrome market faces potential supply growth with factories and newer projects emerging in the northern and southern parts of the country.

However, subdued demand from the downstream steel mills amid high costs is injecting cautious optimism among market participants.

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