India: Ferro chrome prices inch down as buyers resist higher offers

Ferro chrome prices in India dropped w-o-w due to subdued demand, despite the increase in chrome ore prices last week. Although the price drop was not sharp, by a moderate over INR 2,000/t, buyers negotiated hard to pull off deals at lower levels.

According to SteelMint's assessment on 7 April, 2022, ferro chrome prices are hovering at around INR 118,000-119,000/t exw-Jajpur. Some major producers are still offering on the higher side due to the high cost of chrome ore. However, they were not able to crack big deals at higher levels.

Factors behind weakening ferro chrome market

• Indian buyers were bargaining hard and trying to lower prices, despite regular domestic demand. This resulted in a drop in ferro chrome prices.
  
  
• Meanwhile, the continuous surge in Covid cases in China was narrowing demand until last week, keeping ferro chrome smelters worried. As prices improved, there was also less stainless steel demand in South Korea. It can be attributed to oversupply in the Indian market, since approximately 60% of ferro chrome production is exported. As a result, producers had to cut down their offers to boost buying.
  
  
• However, Chinese demand for ferro chrome has started to improve as UG2 ore prices are increasing in China, which is creating an upward momentum. Current UG2 ore prices have reached $250/ CIF China, which has led to higher ferro chrome production costs. This is shifting Chinese buying interest to Indian ferro chrome amid panic buying.
  
  
• Furthermore, Indian smelters were also focused on European markets due to high prices in Europe amid tight supply and high energy costs caused by the Russian ban. According to one of the major sellers, European market requirements are around 10,000-15,000 t/month. The producers still had sufficient ferro chrome in hand to support the downtrend in prices.
  
  
• Moreover, FACOR's ferro chrome auction held on 5 April, 2022 was concluded at around INR 117,000/t exw-Jajpur. This has also impacted the ferro chrome prices.
  
  

Outlook
As of now, ferro chrome prices in India and China are equivalent. Participants expect further price increases in Chinese ferro chrome due to rising chrome ore prices over the next two-three weeks. The smelters are optimistic and producers are anticipating a hike in Indian ferro chrome prices soon.