India: Ferro chrome prices fall sharply w-o-w following lower bids at FACOR's auction

• Following FACOR's auction, buyers reject higher offers
  
  
• Tsingshan's Dec tender prices plunge RMB 700/t m-o-m
  
  

Indian high-carbon ferro chrome (HC60%, Si:4%) prices dropped sharply by INR 1,350/tonne (t) ($16/t) w-o-w to INR 107,150/t ($1,268/t) exw-Jajpur on 27 November. Lower bids at FACOR's latest ferro chrome auction exerted downward pressure on prices. No spot trades were recorded by BigMint this week.

High-carbon, low-silicon ferro chrome prices witnessed a drop as well, of INR 1,250/t ($15/t) w-o-w to INR 113,250/t ($1,340/t) exw-Jajpur. For low-carbon (C:0.1%) ferro chrome, prices were mostly stable w-o-w, with a slight fall of INR 200/t ($2/t) to INR 210,300/t ($2,489/t) exw-Durgapur.

Market scenario

Major domestic auctions see contrarian trends: Two major auctions, one from the Odisha Mining Corporation (OMC) and the other from Vedanta-FACOR, witnessed divergent trends in terms of the change in bid prices.

At OMC's chrome ore auction on 20 November, bids rose by 1-11% m-o-m (INR 448-2,633/t) for most grades. Conversely, at Vedanta-FACOR's ferro chrome auction on 22 November, the bigger lot of 10-150 mm fetched an H1 price of INR 106,700/t ($1,263/t) exw, marking a decline of INR 2,200/t ($26/t) as compared to the previous auction on 11 November.

With chrome ore being a major raw material for ferro chrome, offers for the latter increased following higher prices at OMC's auction. A trader informed BigMint, "Ferro chrome offers are at INR 113,000-118,000/t ($1,337-1,397/t) exw following the latest OMC auction." However, amid lower bids at FACOR's auction, the higher tags did not gain acceptance from buyers, and thus, the hike could not be sustained for longer.

A major Indian seller also informed BigMint that they would not be offering material until December, as prevailing prices did not align with their cost of production.

Tender prices drop in China: Tender prices of Tsingshan, a Chinese stainless steel giant with a monthly requirement of around 140,000 t of ferro chrome, have a major influence on the Chinese domestic and Indian export markets. Recently, Tsingshan set its tender prices for December at RMB 7,395/t ($1,020/t) DAP, including taxes, reflecting a significant drop of RMB 700/t ($97/t) m-o-m. Sources indicated that sufficient inventories of ferro chrome, as well as stainless steel, prompted this price drop.

Domestic (HC60%) prices in China also slipped by RMB 100/t ($14/t) w-o-w to RMB 7,800/t ($1,076/t) exw-Inner Mongolia.

Stainless steel prices remain stable: Prices of 304-grade stainless steel hot-rolled coils (HRCs) were unchanged w-o-w at INR 179,000/t ($2,119/t) exw-Mumbai. Although the Maharashtra state elections have concluded, demand was subdued and is expected to remain like this for the rest of this year.

Outlook

In the near term, prices might stay under pressure, as buyers are not willing to entertain higher offers.