India: Ferro chrome prices edge up on higher demand, rising production costs

Indian ferro chrome prices rose by INR 2,500/t w-o-w amid slightly better demand. Moreover, high production costs due to hike in raw material costs kept prices supported.

According to SteelMint's assessment on 27 October, producers were offering at around INR 105,000-106,000/t exw Jajpur depending upon the availability of stocks.

Factors supporting ferro chrome prices

• Demand recovery: Smelters received multiple enquiries from both domestic and export markets. This led producers to raise their prices. However, only a few lots of around 1,500 t ferro chrome were sold because the majority of buyers were waiting for FACOR's ferro chrome auction on 27 October, while some were waiting for a Chinese stainless steel major's ferro chrome purchase tender price.
  
  
• Chrome ore prices rise: Domestic chrome ore prices have edged up. Meanwhile, imported chrome prices rose due to high shipping costs and an unstable geopolitical situation in the international chrome ore market. Low spot inventory at ports in China kept prices supported. As a result, ferro chrome prices rose in tandem with production costs.
  
  
• China's ferro chrome prices rise: China's ferro chrome (HC60%) prices inched up by RMB 100/t ($14/t) to RMB 8,750/t ($ 1,209/t) exw-Inner Mongolia as the ferro chrome market showed signs of recovery amid better demand as some buyers restocked. In addition, coke and chrome ore prices were showing a slow upward trend, which pushed up the production cost of ferro chrome. Furthermore, the severe epidemic in some parts of the country resulted in a decrease in output of ferro chrome resulting in a positive trend in the overall, with Indian smelters following suit.
  
  

Outlook
Smelters are optimistic about ferro chrome prices and demand. It is expected that prices would remain supported as the strike in South Africa may impact supply. Furthermore, a reduction in Chinese production may shift demand into China, indicating a green shoot of optimism. Market participants expect Chinese stainless steel smelters' tender prices to rise in the coming days.