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India: Ferro chrome market at standstill post-OMC auction

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Ferro Chrome

BigMint Bureau

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22 Feb 2024, 18:51 IST

India: Ferro chrome market at standstill post-OMC auction

Higher premiums achieved at OMC's auction

Bid-offer disparity prevents trade

Prices for Indian high-carbon ferrochrome (HC60%, Si:4%) increased by INR 3,100/t ($37/t) w-o-w. Prices rose after conclusion of OMC's chrome ore auction which saw aggressive bidding and higher premiums.

Based on BigMint's assessment on 21 February, high-carbon ferro chrome (HC60%, Si:4%) prices were standing at INR 121,000/t ($1,459/t) exw-Jajpur. No major deals were reported as majority of the market participants sought more clarity of prices.

In addition, prices for high-carbon low-silicon ferro chrome (HC60%, Si:2%) also increased by INR 2,900/t ($35/t) w-o-w, reaching INR 128,400/t ($1,549/t) exw-Jajpur on 22 February.

Weekly market recap

Aftermath of OMC's auction: The entire 56,000 t of chrome ore that was up for auction was sold out during OMC's auction on 19 February. Chrome ore was in good demand and there was a restricted supply, which led to premiums being attained at INR 5,500-13,000/t ($66-157/t) above the base price. Prices also went up INR 419-4,992/t ($5-60/t) over the previous auction's bid price of INR 4,300-8,400/t ($52-101/t).

Following this, some producers started to elevate their offers in the range of INR 122,000-124,000/t ($1,472-1,497/t), exw but were also mindful of the acceptance level from buyers. However, traders indicated workable levels may be around INR 120,000-121,000/t ($1,448-1,460/t) exw. Additionally, a buyer told BigMint, "I think every time after the auction, the rates go to higher level but don't sustain."

"Sellers have lifted offers post-OMC auction, but there are no firm bids at these offers", highlighted a trader.

Stable Chinese offers: Ferro chrome (HC60%) prices in China stayed steady w-o-w at RMB 8,900/t ($1,238/t) exw-Inner Mongolia. Reports indicated that steel mills had enough inventory to keep operations running this month and were waiting for tender prices for the next month.

State of stainless steel market: Stainless steel prices for 304 grade dropped by INR 2,000/t ($24/t) w-o-w to INR 174,000/t ($2,099/t) exw-Mumbai. Although there was a slight increase in LME future prices, demand remained sluggish in this sector amid fewer inquiries.

Outlook

Given the present market conditions, price trends are expected to become clearer in the coming days, largely depending on how buyers respond to the offers.