India: Ferro chrome prices on the decline amid weak demand

Indian ferro chrome (HC60%) prices fell further this week by INR 2,500/t due to sluggish demand.

According to SteelMint's assessment on 15 June, Indian ferro chrome prices were hovering at around INR 110,200/t exw-Jajpur. Most of the deals were concluded in the range of INR 110,500-110,000/t. However, some deals were heard at INR 109,000/t exw as well earlier this week.

Factors affecting prices

• Navigating uncertainty: Despite enough market supply and production of ferro chrome, prices decreased as a result of low demand. Buyers were not in a hurry to buy material since they were expecting prices to drop even further. Additionally, most deals often take place at the start or end of the month, which further pushed prices down.
  
  
• Stainless steel market impact: Although stainless steel prices remained unchanged this week, there was limited buying interest. Domestic stainless steel prices stood at INR 200,000/t and INR 3,50,000/t for 304 and 316 grades, respectively, as assessed by SteelMint on 13 June. There was a decline in scrap prices as well, which had an impact on ferro chrome and stainless steel demand.
  
  
• Global influence: Domestic ferro chrome prices in China also feel this week to RMB 8,700-8,800/t ($1,216-1,330/t). Prices decreased as a result of lower demand from local stainless steel producers. Additionally, the supply of UG2 chrome ore from South Africa increased, which reduced production costs. Producers were not in a rush to acquire material because a new round of steel bidding is underway.
  
  

Outlook

Given the current trend in demand and declining global costs, prices could drop even further. Although a sudden decline is less likely, prices could be affected by relatively slight changes. Market participants are also awaiting OMC's chrome ore auction results, which may provide a clear picture in domestic prices. The miner has scheduled an auction for 83,600 t of chrome ore of various grades (40-54%) and sizes from its South Kaliapani and Sukrangi mines on 16 June.