India: Ferro chrome prices fall further as demand remains tepid

Indian ferro chrome prices fell marginally w-o-w due to sluggish demand and hard bargaining by buyers. Furthermore, the majority of buyers were in a wait-and-watch mode in anticipation of a further fall in prices as inventory piled up with producers. Moreover, weak Chinese demand also continued to weigh on ferro chrome prices.

According to SteelMint's assessment on 24 November, ferro chrome smelters were able to conclude deals of around 2,600 t in the range of INR 98,000- 99,000/t exw-Jajpur this week.

Demand was also subdued as the majority of buyers adopted a wait-and-watch policy due to the following factors:

• Increasing Covid cases in China: Since last week, the Covid situation in China has deteriorated. Many provinces have been placed under lockdown and market participants believe it will take one to two weaks for the situation to normalise. This had an impact on China's inland transportation and manufacturing. Furthermore, some buyers were expecting a drop in tender prices by a Chinese stainless steel producer in the coming weeks. As a result, demand was subdued.
  
  
• South Africa load shedding: Eskom, South Africa's power utility, announced that its load shedding schedule will be changed, removing stages 5 and 3 from the week's schedule. Due to production cuts, this could have an impact on chrome ore and ferro chrome prices. According to sources, if South Africa is in a bad situation in the coming weeks, there is slim chance that prices will rise. However, it is dependent on where the demand is coming from. As a result, seaborne buyers preferred to hold.
  
  
• Removal of stainless steel export duty in India: The government rolled back export duties on steel and steelmaking raw materials late on November 18. As a result, domestic buyers maintained a wait-and-see attitude, as market participants were eager to understand the scenario post duty removal.
  
  

Outcome
In such a volatile market, predicting the levels to which prices may fall seems difficult. However, there is limited to no chance of a bounce back in ferro chrome prices in the coming week, considering tepid demand in China amid rising Covid cases in that country.