India: Ferro chrome prices fall on global cues, declining stainless steel offers

Indian ferro chrome prices (HC60%, Si:4%) decreased w-o-w compared to the previous assessment on 18 October, 2023. Prices dropped as the domestic stainless steel market continued to remain bearish and lower prices in China slowed down exports from India.

As per SteelMint's assessment on 25 October, high-carbon ferro chrome (HC60%, Si:4%) prices stood at INR 112,000/t exw-Jajpur. In the INR 111,000-114,000/t price range, about 5,000 t of trades were concluded.

Prices for high-carbon low-silicon ferro chrome (HC 60%, Si:2%) also decreased by INR 5,750/t w-o-w to INR 119,750/t exw-Jajpur on 26 October.

Factors suppressing prices

Chinese mills lower bids: Tsingshan, a major stainless steel producer in China, announced its ferro chrome tender prices for November deliveries at RMB 8,695/t ($1,188/t), down RMB 300/t ($41/t) m-o-m. This did not meet the expectation of the market and spot prices fell even lower than this price. The fall in prices was majorly impacted by stainless steel mills' announcement of lowering their output and taking maintenance break till November. Prices for UG2 chrome ore (40-42%) also declined to $285-290/t.

Indian stainless steel prices fall: Stainless steel prices in India for 304 grade fell by INR 1,000/t w-o-w to INR 200,000/t exw-Mumbai. While prices for 316 grade remained stable w-o-w at INR 340,000/t exw-Mumbai. However, demand for 200 and 400 series remained steady due to the ongoing festive season. The price drop was caused by a number of factors, including weakening demand, reduced raw material and futures prices, and weak global sentiments. Additionally, there are reports that Chinese products made of 200 series stainless steel may be subject to countervailing duties.

Reduced profits of domestic producers: Ferro chrome prices were not feasible for some producers as cost of production remained on the higher side. They were forced to reduce production as a result of negligible profits. Furthermore, a decrease in China's spot prices caused a slowdown in exports from India.

Outlook

With both the domestic and Chinese markets not performing well, there is a possibility of further price correction in the coming weeks. FACOR's upcoming auction on 27 October will also determine the course of the domestic market.