India: Ferro chrome prices fall marginally on reduced trade and export volumes

Indian ferro chrome prices (HC60%, Si:4%) decreased by INR 4,000/t w-o-w from the previous assessment on 27 September. Prices decreased after a sudden surge in prices which went to INR 127,000/t exw post OMC's auction on 18 September. However, prices couldn't be held as buyers had booked material as needed and negotiations also increased.

As per SteelMint's assessment on 4 October, Indian high carbon ferro chrome (HC60%, Si:4%) prices stood at INR 121,500/t exw-Jajpur. Around 2,000 t of deals were finalized in the price bracket of INR 120,500-122,000/t.

Furthermore, high carbon low silicon ferro chrome (HC 60%, Si: 2%) prices also decreased by INR 2,000/t w-o-w to INR 131,000/t exw-Jajpur on 5 October. However, the quantum of price drop is relatively less amidst less offers in the market, cited sources.

Factors leading to price decline

Buyers hold back new purchases: The majority of the buyers who purchase in bulk had already made their essential material purchases, thus demand remained low. Some manufacturers reduced their offerings and opted for panic selling, but market participants were still not interested in trading material. However, some producers kept their offers at higher side which protected prices from sharp decline.

Stainless steel market is in a bearish state: Stainless steel prices for 304 and 316 grades fell by INR 2,000/t and INR 1,000/t to stand at INR 205,000/t and INR 353,000/t respectively, as assessed by SteelMint on 4 Oct'23. Due to the restricted supply and declining prices of raw materials, domestic stainless steel demand remained subdued. Buyers adopted a wait-and-watch strategy and stopped booking further. Also, availability of 316 grade stainless steel remained scarce in the market. The demand for ferro chrome from this industry therefore remained low.

Ongoing Chinese holidays keep global markets subdued: China's market is silent due to the ongoing mid-autumn holidays. India's export therefore was muted. Exporters were also less interested because China's offers ranged between 98-100 cents/lb, which was significantly less than the costs in the Indian market.

Outlook

Given the present subdued demand, some producers may continue panic selling, leading to price corrections. Clarity regarding the market's direction is expected once the Chinese market resumes operations and base prices for this month's OMC chrome ore auction are disclosed.