India: Ferro chrome prices correct as buyers resist higher offers

Indian ferro chrome prices dropped sharply by around INR 3,750/t w-o-w as producers had to lower their offers in order to close deals this week as buyers showed resistance to higher prices. There was enough selling pressure.

According to SteelMint's assessment on 2 March, smelters were offering around INR 121,400/t exw Jajpur, and 3,500 t trades were recorded after prices were reduced.

Factors driving prices down

• Higher prices dull demand: Domestic demand remained lacklustre as buyers opted for a wait-and-watch mode. They were waiting for Vedanta's ferro chrome auction, held on 28 February. However, the auction closed at INR 123,100/t, near to the base prices. But small producers were facing difficulty closing deals at higher levels. This led to most sellers trimming their offers to attract buying interest.
  
  
• Yuan depreciation reduces India's offers: Export demand, particularly from China, remained subdued as a result of the yuan's depreciation and high costs. Markets fell this week, with sources blaming buyer disinterest for the lack of price support. This also put pressure on producers to lower their offers.
  
  
• Chrome ore prices remain firm: Chrome ore import prices remained stable as tariffs loom and African exports have declined. UG2 chrome ore was being offered at $290/dmt while Turkish chrome ore offers remained higher at $365/dmt CNF China, assessed on 28 February.
  
  
• Stainless steel prices under pressure: Stainless steel prices fell by INR 4,000/t w-o-w as companies rush to meet the fiscal year target amid weak demand. Meanwhile, Indian stainless steel (304 grade, HRC) prices were quoted at INR 226,000/t exw-Mumbai on February 28. Furthermore, nickel prices on the London Metal Exchange (LME) fell by around 4% w-o-w and 15% m-o-m. This also led to lower ferro chrome prices.
  
  

Outlook
The Indian ferro chrome market is expected to remain under pressure as weak demand is likely to persist in the coming weeks. However, it is unlikely that any significant drop will occur, sources informed.