India: Ferro chrome prices plunge to over 3-month low amid bid-offer gaps, drop in auction bids

• Bids at FACOR's auction decline for 3rd straight time
  
  
• Chinese prices fall on production cuts at steelmakers
  
  

Indian high-carbon ferro chrome (HC60%, Si:4%) prices fell by INR 1,050/tonne (t) ($12/t) w-o-w as compared to the previous assessment on 27 November. Prices have plunged to over a three-month low, last seen on 21 August 2024, amid a widening bid-offer gap and the subdued response at Vedanta-FACOR's latest ferro chrome auction, as per sources.

BigMint's assessment on 4 December indicates that Indian high-carbon ferro chrome (HC60%, Si:4%) prices were at INR 106,100/t ($1,252/t) exw-Jajpur. Trades of around 2,300 t were concluded this week in the price bracket of INR 105,500-107,700/t ($1,245-1,271/t) exw.

For high-carbon, low-silicon and low-carbon (C:0.1%) ferro chrome, prices were unchanged w-o-w at INR 113,250/t ($1,337/t) exw-Jajpur and INR 210,300/t ($2,482/t) exw-Durgapur, respectively.

Market summary

FACOR's auctions continue to see fall in bids: Bids have declined continuously at Vedanta-FACOR's last three ferro chrome auctions, including the latest one on 2 December. The larger lot of 10-150 mm was sold at INR 105,500/t ($1,245/t) exw, which was the base price.

The subdued response was a reflection of the prevailing market scenario, with buyers reluctant to engage with higher offers. Along the same lines, a seller stated, "We have decided not to offer any material in the market now. We will also reduce our furnace load, as our losses have increased extensively."

China's prices drop amid production cuts at steel mills: Ferro chrome (HC60%) prices in China dropped by RMB 300/t ($41/t) w-o-w to RMB 7,500/t ($1,032/t) exw-Inner Mongolia. Reportedly, steel mills in southern China reduced their output to better align with the level of demand in the market.

The stainless steel segment initially benefitted from domestic quantitative easing policies. However, with sluggish downstream demand, which is expected to continue till the end of the year, reducing supply remains the only viable option for producers. This might adversely affect the ferro chrome market.

Domestic stainless steel sector sees need-based buying: Prices of 304-grade stainless steel hot-rolled coils (HRCs) fell slightly by INR 1,000/t ($12/t) w-o-w to INR 178,000/t ($2,101/t) exw-Mumbai. The market was majorly driven by need-based buying, and overall demand remained weak.

In the near term, stainless steel prices may undergo some corrections, as demand typically weakens towards the year-end. Sources informed that demand may pick up pace after January 2025.

Outlook

With bearish sentiments dominating the market due to lower bids at domestic auctions, along with subdued demand in China, Indian ferro chrome prices will continue to face pressure in the days ahead.