India: Ferro chrome prices decline amid ongoing negotiations

• Continued resistance of buyers towards higher offers keep prices under pressure
  
  
• Stainless steel demand remains subdued despite price hike
  
  

In comparison to the previous assessment on 28 February, prices of Indian high-carbon ferro chrome (HC60%, Si:4%) decreased by INR 1,000/t ($12/t) w-o-w. Prices dropped as buyers were still skeptical about higher offers.

As per BigMint's assessment on 6 March, high-carbon ferro chrome (HC60%, Si:4%) prices stood at INR 120,000/t ($1,449/t) exw-Jajpur. Around 1,400 t of deals were finalised previous week in the price bracket of INR 119,500-122,500/t ($1,443-1,479/t), as per data collected by BigMint.

However, prices of high-carbon low-silicon ferro chrome (HC60%, Si:2%) remained stable with a marginal drop of INR 200/t ($2/t) w-o-w, reaching INR 126,800/t ($1,531/t) exw-Jajpur on 7 March.

Market recap over the week

Buyers cautious in response to elevated offers: Producers were quoting higher prices due to increased production costs and rising chrome ore prices, but prices showed less sustainability in the market. This led many of them to lower their offers as routine operations needed to be carried along with maintaining the flow of funds.

A major manufacturer of stainless steel told BigMint, "I'm receiving quotes to purchase material at INR 118,000-119,000/t ($1,425-1,437/t), but delaying purchase as prices could drop even further."

Unchanged conditions in Chinese market: Prices for ferro chrome (HC60%) in China were stable w-o-w at RMB 8,900/t ($1,236/t) exw-Inner Mongolia. Domestic market remained similar to those in India amid rising production costs and declining profit margins. It may take some time for the market to recover as it is still under pressure.

There were also reports that smaller smelting units may get closed and replaced with larger furnaces. As a result, the northern region-especially Inner Mongolia, would produce more than the southern region.

Price hike in stainless steel sector: Stainless steel prices for 304 grade in India saw a w-o-w rise of INR 4,000/t ($48/t) and were standing at INR 180,000/t ($2,174/t) exw-Mumbai. Price increase was majorly influenced by increase in LME nickel prices. Despite this, demand and buying interest remained sluggish.

Outlook

Given the prevailing market conditions, prices may undergo additional correction in the coming days, although a significant decline is less likely.