India: Ferro Chrome Prices fall for fourth consecutive week

Ferro Chrome prices have been falling down for four weeks in a row; producers feel the situation may worsen in the coming weeks. One of the major producers in Jajpur shared in conversation with SteelMint that India is a major exporter of Ferro Chrome, and with Chinese market closed, the pressure over the domestic producers is building up and the prices are sinking. Although the selling pressure intensified, the producers are hoping that China should stabilize by April, which may prove to be a boon for the domestic market.

In the domestic market, Ferro Chrome Prices are assessed to be at around INR 61,000/MT Ex-Jajpur. Meanwhile, it has also been heard that a few deals happened at lower prices. In the export market, prices remain unchanged due to near to zero transactions. The offers in the market are as under:
o CNF South Korea (10-50 mm, HC 60%) is at around 65 cents/lb
o CNF Japan (10-50 mm, HC 60%) is at 66cents/lb
o CNF China, the prices are at around 62cents/lb.

China
Major Stainless Steel companies had rolled over the prices of Ferro Chrome for February on M-o-M basis. Although the market is open but due to the serious epidemic concerns, logistic is severely affected and the production cut is quite significant. Meanwhile, there is an anecdote running down in the market that the Chinese Stainless steel mills may release their purchase tender prices for April and might skip for March deliveries amidst possible logistical issues and surplus inventory. In addition to this, due to the global spread of Covid-19, the economic stability is facing a severe challenge and the steel export is also expected to weaken. Steel mills are low in cash flow, the procurement process for raw materials has been prolonged, and due to the almost silent spot market, financial support is still the biggest challenge for the Steel mills.

Future Outlook
Ferro Chrome prices are likely to go down further in the coming weeks as the market is flooded with Ferro Chrome. However, the OMC auction which is scheduled on 27th Feb 2020 might be a deciding factor on how much smelters are willing to continue their manufacturing at such unfavourable conditions. The market still seems to be pessimistic in India as the raw material prices are hitting high and the product cost is going down. The situation is, however, highly unlikely to change.