India: Ferro Chrome Prices Plunges on Weak Chinese Demand

Low Ferro Chrome prices in China amid ample domestic supply and falling Stainless Steel prices forced the Indian producers to reduce their offers to generate trading possibilities.

Indian Ferro Chrome producers highlighted that there is no real demand coming in from China and that their offers are just being put to test.

Earlier, major stainless steelmakers like Baosteel and Tsingshan lowered their May purchase prices by 500 Yuan M-o-M for Nov'17. As a result, Chinese buyers are only amenable to prices lower than 89 cents/lb CIF.

Many Chinese stainless mills will be conducting maintenance at their plants in sight of weak demand and prices in the stainless steel market. Moreover, strict environmental norms have resulted in output cuts among some stainless steel producers, reducing demand for Ferro chrome.

Ferro chrome prices are also under pressure from falling chrome ore prices in China. Chrome ore prices in the Chinese spot market have fallen sharply by USD 45/MT W-o-W and South African 40-42% chrome ore was heard trading this week at USD 180/MT CIF China. Many attributed this sharp price fall to the weak Chinese Stainless Steel market and low demand for Ferro chrome further pressurizing Chrome Ore prices.

Indian offers are assessed at 89 cents/lb CNF China but counter-offers from the buyers are much lower. SteelMint assessed that other overseas markets have also pulled out and are in a wait-and-watch mode, for any deal between India and China to conclude. In line with the same, offers in Japan and Korea went down to 95 cents/lb and 94 cents/lb CIF respectively, as they are closely following the Chinese market.

Domestic market also reflected a similarity to the Chinese market as offers in India has corrected downwards to INR 78,000/MT (Ex-Odisha).

The domestic Ferro chrome market has trended down on very low volume deals concluded in the export market, as selling pressure grows on Ferro chrome producers, having more material to sell in the domestic market.

SteelMint learned that most market participants hold a pessimistic outlook towards the future market trend.