India: Ferro chrome prices inch up amid rising inquiries

Indian ferro chrome prices increased w-o-w as producers tried to boost their offers to reduce losses amid rising ferro chrome inquiries in the domestic market.

According to SteelMint's assessment on 22 September 2022, the majority of producers began offering at around INR 94,000-95,000/t exw. However, buyers have not fully accepted the offers, and only a small number of transactions have been recorded this week.

Factors influencing buyers to push up prices:

• Inquiries improved in the domestic market: Ferro chrome smelters received ample inquiries this week as some major stainless-steel producers began production at full capacity, with a focus on the production of 200 and 300 series stainless steel due to increased demand because of the upcoming festive season. The 200 and 304 series stainless steels are the most common types used in the kitchen. As a result of the increased inquires, producers have raised their prices.
  
  
• High production cost: Smelters that outsourced chrome ore faced high production costs. Odisha Mining Corporation's (OMC's) chrome ore auction for higher grade material also ended this week at a 6-8% premium to the base price. As a result, the production cost increased. This influenced the producers to raise the prices in order to offset the losses.
  
  
• Stainless steel prices rise: Stainless steel prices also increased this week owing to good demand. Meanwhile, stainless steel (304 grade, HRC) prices were assessed on 20 September at INR 240,000/t ex-Mumbai, up by INR 3,000/t w-o-w. This also supported ferro chrome prices.
  
  

China's market overview:
China's ferro chrome (HC60%) prices inched up by RMB 100/t ($ 14/t) to RMB 8,050/t ($ 1,140/t) exw-Inner Mongolia as the ferro chrome market showed signs of recovery. The market trading environment also remaining positive, and actual trading volume increased marginally. Meanwhile, the international chrome ore market was impacted by the rising prices of downstream ferro chrome, but the market as a whole performed well.

South Africa market overview:
The state power utility, Eskom, is struggling to meet electricity demand due to the power outage at its old and poorly maintained power stations. This led to the power supply crisis, which could have an impact on South African chromite production. Ferro chrome (Cr 50%) from the country is being offered at 87 cents/lb, CIF China, while UG2 chrome ore (40-42%) concentrates are offered at around $205-215/dmt at Tianjin Port. Disruptions in power supply would lead to production loss and lend support to prices.

Outlook
According to the current situation of improving inquiries, Indian ferro chrome smelters are attempting to reach offers of up to INR 100,000/t exw to mitigate the losses. But it remains to be seen how far buyers will accept these prices.