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India: Ferro chrome prices drop to 4-months low, further drop likely

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Ferro Chrome

BigMint Bureau

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26 Dec 2024, 17:54 IST

India: Ferro chrome prices drop to 4-months low, further drop likely

Bids decline for 4th straight time at FACOR's auction

European benchmark prices by Samancor drop 11 cents/lb q-o-q

Indian high-carbon ferro chrome (HC60%, Si:4%) prices fell by INR 1,500/t ($18/t) as compared to the previous assessment on 18 December. Prices reached their lowest point in last 4 months due to widening gaps in bids and offers along with lower bids fetched in recent Vedanta-FACOR's ferro chrome auction.

Indian high-carbon ferro chrome (HC60%, Si:4%) prices were INR 103,500/t ($1,213/t) exw-Jajpur, as per BigMint's assessment on 24 December. Approximately 900 t of deals were reported to BigMint last week in the price range of INR 103,000-105,500/t ($1,208-1,237/t) exw.

In addition, prices dropped for high-carbon, low-silicon ferro chrome as well, going down by INR 3,000/t ($35/t) w-o-w to INR 110,600/t ($1,297/t) exw-Jajpur. It fell by INR 4,500/t ($53/t) w-o-w for for low-carbon (C:0.1%) ferro chrome to INR 201,000/t ($2,356/t) exw-Durgapur. Around 100 t of trade was carried out for in in INR 198,000-199,000/t ($2,321-2,333/t) exw price bracket.

Market recap

Persistent downtrend in bids at FACOR's auction: The recent ferro chrome auction by FACOR on 20 December saw bids dropping for 4th consecutive time. The larger lot of 10-150 mm was closed at INR 103,600/t ($1,215/t) exw, marking decrease of INR 1,900/t ($22/t) from the previous auction on 2 December.

This was reflection of the current subdued conditions in the market. A seller was recently quoted as saying to BigMint, "There's absolutely no market currently. Its difficult for us to survive even with reduced chrome ore prices."

Global trends: Domestic prices in China (HC60%) were unchanged w-o-w at RMB 7,400/t ($1,014/t) exw-Inner Mongolia. The imbalance in supply and demand was still there and with sluggish demand, reducing output was the only option remaining for producers.

On 24 December, Samancor announced European benchmark prices for Q1CY'25 at 135 cents/lb, a drop of 11 cents/lb q-o-q. Along with it, Japan's Nippon Steel Stainless also finalized its ferro chrome purchase price for the same period at $1.43/lb CNF Japan, falling by around 7% q-o-q.

Stagnant conditions in stainless steel sector: Stainless steel prices for 304 grade HRC were steady w-o-w at INR 178,000/t ($2,087/t) exw-Mumbai. Demand continued to remain weak for it and is expected to improve post January 2025. Additionally, LME nickel prices also reached 2-year low and sources indicated that oversupply was one of the key factor for it.

Outlook

Taking into account current market conditions, prices may experience further drop in the days ahead owing to weaker stainless steel market and fall in bids at OMC's recent chrome ore auction.