India: Ferro Chrome Prices Fall as Selling Pressure Builds up

Ferro Chrome Prices have been fluctuating since the latter part of Sep'19. The increase in prices was in line with material shortage and increase in the stainless steel prices due to the news of Nickel export ban from Indonesia. However, it was short-lived and the market was taken aback by down streaming sentiments from the buyers' end.

From the perspective of the stainless steel market, the purchase intention of the buyer is insufficient, the overall willingness to hold large reserves is lacking, the wait-and-watch attitude is intensified, and the demand for stainless steel is gradually decreasing. In addition to this, the inventories with the Stainless steel producers are sufficient and the pattern of oversupply is continuing for Ferro Chrome. Furthermore, with the recent decline in the Nickel prices, the stainless steel market has faced more downward pressure. The Ferro Chrome producers in the domestic market are in a difficult situation, as the selling pressure is increasing.

"Sellers are competitive, and are willing to reduce the prices to significant levels; however, the pressure is intensifying as the production cost is rising and the selling cost is simultaneously coming down", stated a producer to SteelMint. "Increased Chrome Ore prices have escalated the production cost, but we cannot add and sell at that cost in the market, as the buyers are negotiating aggressively and they are aware that the global market is down, so we have to settle in the domestic market, as there is no point in negotiating ", another producer source from India shared.

Currently, the domestic price for Ferro Chrome in India is assessed at around INR 67,000/MT. However, a few producers with utmost cash crunch are dealing at lower prices than the stated offers. Offers for CNF South Korea (10-50 mm, HC 60%) is at around 73 cents/lb, CNF Japan (10-50 mm, HC 60%) is at 74 cents/lb and for CNF China the prices are at around 70 cents/lb. Prices for China have been lowered down, but there are no deals happening in the export market. The export market remains dull with the down-trending stainless steel market.

On the future outlook, the price of Ferro Chrome seems to be stable but low in the near future. Any future increase in prices is possible only if severe production cuts happen globally. Due to the oversupply of Ferro Chrome in the domestic market and weak buying interest from the user end, the prices are under pressure.