India: Ferro chrome prices decline to over 3-month low amid market slowdown

Indian ferro chrome prices (HC60%, Si:4%) fell further by INR 1,600/t w-o-w in comparison to the previous assessment on 8 November. Prices dropped as there was slowdown in the market due to festive holidays and some manufacturers opting to lower production amid reduced profits. Prices have fallen to over three-month low since early August , 2023, as per data maintained with SteelMint.

As per SteelMint's assessment on 15 November, high-carbon ferro chrome (HC60%, Si:4%) prices stood at INR 104,800/t exw-Jajpur. Approximately 1,500 t of deals were finalised in the price range of INR 104,500-105,000/t.

However, prices of high-carbon low-silicon ferro chrome (HC 60%, Si: 2%) stayed stable at INR 113,800/t exw-Jajpur with a marginal drop of INR 200/t w-o-w on 16 November.

Factors keeping prices under pressure

Challenges for sellers leading to production cutbacks: Ferro chrome prices were falling for past 3 months because of low demand and global market was also not performing well. Sellers were in pressure to sell more but were having hard time negotiating prices. Hence, some of them opted for production cuts as profit margins were getting diminished. This was mainly due to bearish stainless steel market which resulted in loss for the producers.

Stainless steel market overview: The ex-Mumbai prices of stainless steel for 304 and 316 grades stayed steady at INR 192,000/t and INR 330,000/t, respectively. There was a drop in raw material prices and London Metal Exchange (LME) nickel futures prices as well. A more clearer picture of the market might be seen by end of this month or at the beginning of next month.

China's impact: Ferro chrome (HC60%) prices in China remained stable w-o-w at RMB 8,750/t ($1,207/t) exw-Inner Mongolia. The demand, however, was on the lower side and some mills continued to reduce output or were undergoing maintenance work. Despite this, the production of ferro chrome remained sufficient for domestic consumption and there were less inquiries to import material.

Outlook

The direction of prices will depend on the results of OMC's chrome ore auction, which is scheduled on 18 November.