India: Ferro chrome prices escalate on favourable demand-supply dynamics

Indian ferro chrome prices have been laying low for quite some time now and few ferro chrome producers are out of the market due to continuous losses. However, due to pandemic led lockdown, the raw material supply was disrupted, which is still continuing due to the monsoons.

OMC and TATA Steel, both of the major miners are producing at much lower capacity or not producing chrome ore and can only fulfil the previous orders. Meanwhile, with the increased rainfall, the lifting of materials is also getting affected.

Furthermore, the improvement of Stainless steel demand is strong, and the major companies have increased their prices for this month. Higher prices of stainless steel and scarcity of chrome ore are pulling up the prices of ferro chrome.

One of the largest producers of ferro chrome in India has decided not to sell any material in the domestic market for the month and will take a further decision on the allotment quantity in September, depending on the achievable prices in the coming month.

Current Assessments:
Ferro Chrome prices went up by INR 1,500/t due to a pick up in demand along with limited production of the alloy due to chrome ore shortage. SteelMint assessed the offers are at around INR 63,000/t from Jajpur producers and further INR 1,000/t higher from the Durgapur producers. The current assessments are as under:
Ex-Jajpur: INR 62,000/t,
CNF China: cents 65/lb,
CNF Japan: cents 68/lb, and
CNF South Korea: cents 67/lb.

Outlook:
Ferro chrome prices are likely to be well supported, as the raw material scarcity will not solve until the monsoons are over. Meanwhile, by that time, demand from the stainless steel sector (domestic as well as export) might also help boost up the prices.