India: Ferro chrome prices reach 3-month high after OMC's chrome ore auction

• Tsingshan, TISCO keep July ferro chrome tender prices stable
  
  
• Domestic stainless steel market sluggish, prices drop slightly
  
  

Prices of Indian high-carbon ferro chrome (HC60%, Si:4%) rose by INR 2,700/t ($32/t) w-o-w compared to the previous assessment on 19 June. Prices are now at a nearly 3-month high post higher bids placed in OMC's chrome ore auction.

As per BigMint's assessment on 26 June, high-carbon ferro chrome (HC60%, Si:4%) prices were INR 112,000/t ($1,342/t) exw-Jajpur. Around 2,100 t of trades were reported last week within a price bracket of INR 110,000-113,500/t ($1,318-1,360/t) exw.

Prices increased for high-carbon low-silicon ferro chrome (HC60%, Si:2%) as well, increasing by INR 1,500/t ($18/t) w-o-w to INR 118,500/t ($1,420/t) exw-Jajpur. However, no variations were seen in low-carbon (C:0.1%) ferro chrome prices which remained stable w-o-w at INR 229,000/t ($2,743/t) exw-Durgapur on 27 June.

Factors affecting prices

Higher bids in OMC auction: The monthly auctions by OMC continue to be a decisive factor in the domestic market. In the recent auction on 21 June, the entire 60,100 t of ore was sold out, with premiums moving up by around 30% m-o-m.

After the auction, manufacturers began to quote higher between INR 113,000-115,000/t ($1,354-1,378/t) exw. However, deals were only heard at around INR 113,500/t ($1,360/t) exw levels. Acceptance of offers higher than this is yet to be seen.

A major domestic producer who was not offering material earlier informed BigMint,"We are planning to start supplies from July. Recently, a deal for a small quantity took place at INR 113,500/t ($1,360/t) exw."

Stable prices in China: Prices for ferro chrome (HC60%) in China were stable w-o-w at RMB 9,250/t ($1,273/t) exw-Inner Mongolia. Even though the price of chrome ore increased, prices of ferro chrome could not rise because stainless steel plants were not willing to accept higher prices.

Additionally, Tsingshan and TISCO, two key stainless steel mills, announced their ferro chrome tender prices for July, which were unchanged m-o-m at RMB 8,995/t ($1,237/t) and RMB 8,795/t ($1,210/t), respectively.

Marginal decline in Indian stainless steel prices: Stainless steel prices for 304 grade remained steady even after a slight drop of INR 1,000/t ($12/t) w-o-w to INR 178,000/t ($2,132/t) exw-Mumbai. Meanwhile, a few stainless steel producers are attempting to increase their production, but the sluggish market is hindering their progress. Since LME nickel prices have been showing signs of a downward trend, further price declines are expected in the near term.

Outlook

In the previous week, prices had trended upward but buyer acceptance holds the key. It is expected that the stainless steel market which is under pressure will struggle to support higher offers. FACOR's ferro chrome auction on 28 June will throw up more insights on evolving price trends.