India: Ferro chrome market strengthens following China price rebound

Indian ferro chrome prices increased by INR 1,700/t ($21) w-o-w due to improved inquiries in domestic and overseas markets and high production costs. Offers by manufacturers have progressively increased as a result of rising raw material prices.

According to SteelMint's assessment on 18 May, Indian smelters concluded transactions of around 2,000 t for HC60% grade at around INR 108,000-110,000/t exw. Producers have begun to quote offers which are slightly higher than average offers last week, although deals have not yet been finalised.

Factors supporting prices

• Lack of material in spot market: The lack of spot inventory is impacting the ferro chrome market, giving spot merchants greater motivation to defend their pricing. Due to scarcity of inventory, Indian smelters have received inquiries from foreign markets.
  Furthermore, the downstream ferro chrome market in China has picked up somewhat and the need for raw materials has gradually increased. These changes have boosted demand for ferro chrome in India and the market has strengthened.
  
  
• Falling port stocks in China support prices: The rise of chrome concentrate arrivals at Chinese ports will be limited in the next few weeks, while downstream smelters' demand for both normal production and material replenishment stays strong. It is expected that chrome ore prices will remain strong for a while," a Shanghai-based market watcher said.
  
  

China's stainless steel output up slightly: China's production of stainless steel increased in May and demand for raw materials has also increased. As a result, the ferro chrome market has shown an uptrend.

Outlook
The ferro chrome market is expected to remain strong in the near term. However, the market for downstream stainless steel and adjustments in ferro chrome supply-demand dynamics merit greater consideration.