India: Ferro chrome market looks optimistic amid good buying

Indian ferro chrome producers were upbeat this week, owing to the acceptance of quoted prices by the major steel mills. According to SteelMint's assessment on 28 September, producers were offering at around INR 95,000-97,000/t on exw basis in Odisha. And around 1,700 t of the material was booked in the domestic market at these levels.

However, buyers were expecting the material at around INR 94,000-95,000/t exw-post the Ferro Alloys Corporation Limited's (FACOR's) ferro chrome auction concluded at INR 94,500/t exw on 27 September.

Market highlights

• Demand improves: Domestic demand increased in tandem with increased stainless-steel production as a result of good buying during the festive season. Following this observation, the Indian smelters attempted to sell material at a higher price in order to recover losses incurred previously when the market was bearish and export demand was low.
  
  
• Stainless steel prices inch up: Stainless steel prices rose this week as buyers focused on domestic stainless steel due to a shortage of the imported material. This prompted major stainless-steel producers to raise their bids. Meanwhile, stainless steel (304 grade, HRC) prices were assessed on 27 September at INR 243,000/t ex-Mumbai, an increase of INR 3,000/t (1.3%) w-o-w. This resulted in an increase in ferro chrome prices.
  
  
• Imported chrome ore prices stable: Imported chrome prices remained stable, with a marginal increase w-o-w due to strong buying at the Chinese ports. The spot trading environment was stable, while domestic demand for chrome ore was gradually increasing, and the rise in downstream ferro chrome prices supported development of the chrome ore market.
  According to Customs data, India's chrome ore imports fell 77% m-o-m to around 6,300 t in August. So, low inventory might have triggered the buying, resulting in the chrome ore price rise.This restricted producers from lowering prices.
  
  
• Low transaction in export market: The price difference between sellers' offers and buyers' counter offers resulted in low transaction volumes in the export market. Producers were offering at around 94-95 cents/lb CNF China, while Chinese buyers were looking for 91-92 cents/lb. Furthermore, major buyers were focused on long-term contracts in the export market, while the rest were focused on the domestic market and were willing to sell the material at higher prices due to the increased domestic demand. This also kept domestic ferro chrome prices on the higher side.
  
  

Outlook:
Indian ferro chrome producers are positive and expect prices to remain on the higher side in the coming weeks.