India: Ferro chrome prices fall despite two-year high chrome ore prices

Indian ferro chrome prices fell despite a spike in the ore prices owing to lower demand from the exports market. Since India relies heavily on exports of ferro chrome with more than 50pc sold in the export market.

Limited demand from Chinese market is denting the domestic prices of ferro chrome. Major mills in China have rolled over their prices in October, however, demand from the spot market remains low and buyers are asking for much lower prices. Meanwhile, the domestic market which was once uncertain about the chrome ore availability is almost certain that ore availability wouldn't be an issue after the OMC auctions. Indian ferro chrome producers can only sell at lower levels in line with rising selling pressure, although chrome ore was fetched at much higher levels.

Ferro chrome prices are assessed at INR 69,000/t ex-Odisha. However, a deal was also heard at lower prices. The main reason apart from the dull export market is the oversupply of ferro chrome in the market and intense liquidity crunch faced by most of the manufacturers.

Producers are of the view that it is currently feasible for them to sell at lower prices as the cost of stopping production and restarting operations would be much costlier than taking some losses.

Outlook:
The Chinese Yuan appreciating to a 3-year high has given some hope to the Indian ferro chrome producers as they expect inquiries will improve.