Increasing inquiries from China strengthen Indian ferro chrome market

Indian ferro chrome prices witnessed a marginal downward correction of INR 1,000/tonne (t) w-o-w. Currently, these are trading at INR 107,000/t ex-Jajpur for bulk deals, while many traders reported much higher prices from other regions. Prices of ferro chrome were reduced to up to INR 103,000/t later last week by some smelters after IDCOL tenders were settled at INR 102,000/t ex-plant. However, after a healthy lot of inquiries seen from China, offer prices were increased to the previous week's levels.

However, although prices are showing a downtrend w-o-w, the outlook still remains strong. There are many inquiries from the Chinese traders as the country is heading for a week-long National-Day holidays. Indian ferro chrome smelters reported that major stainless-steel mills have already reserved their quantities and most demand is for the ready shipments. However, the future prospect of demand still remains dicey as along with the ferro chrome production cuts, stainless-steel production is also down in China.

Chinese ferro chrome spot prices increase
Chinese spot prices for ferro chrome increased by around RMB 200/t to RMB 10,100/t in Inner Mongolia. The production curtailment is higher in the northern provinces, while the southern and eastern parts of China have also been affected. Thus, supply tightness still persists in the Chinese spot market, making local traders more active in procuring material from India. However, the producers are still struggling to get higher prices for later deliveries. Current export prices are at 117 cents/lb CIF China, up by 2 cents/lb w-o-w. Indian smelters reported that prices are higher for Korean, Japanese, and Taiwan markets, but the quantity is limited.

Domestic stainless-steel demand to increase
Domestic demand for stainless steel, especially for the 200 series, is expected to increase in the coming month due to the approaching festive season in India. This is expected to further support the Indian ferro chrome market. Meanwhile, the other grades are also expected to find some support due to an increase in the stainless-steel futures in China owing to the production cuts.

Outlook
Indian ferro chrome prices are expected to increase in the coming months owing to a better outlook on stainless steel. Meanwhile, improved prices in the Chinese market are also expected to strengthen the Indian market.