India: Ferro chrome prices firm; to remain supported on improved demand

Indian ferro chrome prices were firm w-o-w with a marginal uptrend seen due to improved demand from domestic and export markets. In addition, increasing chrome ore prices are supporting ferro chrome prices.

Market dynamics have shifted after Chinese inquiries for more material in the spot market. Domestic prices in China reached RMB 8,650/t ($1,365/t) exw-Inner Mongolia for HC 60% grade.

According to SteelMint's assessment on 17 Feb'22, the current market prices are hovering at around INR 105,000-106,000/t exw-Jajpur.

Weekly highlights

• Demand picks up: Indian producers are receiving good inquiries from the domestic market. SteelMint recorded 6,000 t of ferro chrome sales in the domestic market. Additionally, exports from China and Europe have picked up. This led smelters to raise their offers.
  
  
• Supply curtailment: The Indian ferro chrome market dynamics have changed since supply is restricted within the handful of producers. Some are catering to the export market. Thus, only one major producer has sizeable quantity to offer in the domestic market. This also supported ferro chrome prices.
  
  
• Chrome ore prices upbeat: In addition, domestic chrome ore prices have improved. OMC raised its base price by 12% m-o-m in February's auction and received favourable response. Additionally, South African UG2 chrome ore prices increased to $200/t CIF China, the highest since 2018. Lower inventories amid higher consumption in China have resulted in increased demand and consequently, a significant hike in UG2 prices, a trend which is also supporting ferro chrome prices.
  
  
• Stainless steel prices improve: Improved stainless steel prices globally have also encouraged Indian ferro chrome producers to raise their offers.
  One of the major producers explained: "Prices may touch INR 110,000/t soon due to increasing inquiries and raw material costs."
  
  
• Europe's ferro chrome prices rise: European ferro chrome prices also rose due to high electricity and transportation costs. Increasing inquiries also supported European ferro chrome prices as stainless steel and specialty steel producers in Europe have full order books and thus need to source feedstock. This shifted European buyers' interest to Indian ferro chrome despite the lack of containers and delay in vessels.
  
  

Outlook
Indian producers are optimistic and anticipate more inquiries from China as producers there resume stainless steel output post-Winter Olympics.