India: Ferro chrome prices decline on an oversupply in the domestic market

Indian ferro chrome (HC 60%) prices continued to fall this week by INR 1,100/t due to an abundance of material in the domestic market.

According to SteelMint's assessment on 22 June, Indian ferro chrome prices were hovering at INR 109,100/t exw-Jajpur. Most of the deals were concluded in the range of INR 109,000-110,350/t. In addition, recently concluded FACOR's chrome ore auction on 21 June fell in the same range. Some deals were recorded at lower prices of INR 108,000/t as well.

Factors affecting prices

Low export enquiries: Ferro chrome (60%) prices in China stood at RMB 14,500/t (USD 2,022), down by 0.55 w-o-w. Since most producers were waiting for Tsingshan's July purchase tender, they halted supplying the material. Due to an excess chrome ore supply and weak demand from stainless steel factories, prices declined. As a result of price disparity between the Chinese and Indian markets, Indian buyers were a bit hesitant to purchase material at higher rates. The market situation in China caused a decrease in ferro chrome imports, which had an impact on Indian prices.

An oversupplied domestic market: Nearly 50% of the ferro chrome produced in India is exported, making it one of the top exporters in the world. The decline in export inquiries resulted in an abundant domestic supply, compelling producers to lower their offers.

Stainless steel market's influence: According to SteelMint's assessment on 20 June, prices for stainless steel in India for grades 304 and 316 stood at INR 199,000/t and INR 340,000/t, respectively. Imports of less expensive coils caused it to decline by INR 1,000/t w-o-w. Additionally, given the rise in scrap sales, demand for ferro chrome fell.

Outlook

Prices are anticipated to decrease further this month based on the current market trend. A significant decline is less likely, though, given fresh tender pricing from China will soon be made public and export offers could revive the Indian ferro chrome market.