India: Ferro chrome prices rebound to 1-month high post recent auctions

• Bids climb in FACOR's auction, conclude at INR 106,200/t exw
  
  
• Uptrend in Indian stainless steel prices
  
  

Indian high-carbon ferro chrome (HC60%, Si:4%) prices registered an increase of INR 3,600/tonne (t) ($43/t) w-o-w as compared to the previous assessment on 21 August. Prices have reached almost a one-month high following higher bids at the recent chrome ore auction of Odisha Mining Corporation (OMC). Offers increased, which garnered acceptance among buyers in the market.

Domestic prices go up: BigMint assessed Indian high-carbon ferro chrome (HC60%, Si:4%) prices at INR 106,700/t ($1,272/t) exw-Jajpur on 28 August. Deals of approximately 4,000 t were also reported last week within the price bracket of INR 106,000-108,000/t ($1,263-1,287/t) exw.

High-carbon low-silicon ferro chrome (HC60%, Si:2%) and low-carbon (C:0.1%) ferro chrome prices went up by INR 4,000/t ($48/t) w-o-w and INR 1,000/t ($12/t) w-o-w, respectively, reaching INR 113,000/t ($1,347/t) exw-Jajpur and INR 220,000/t ($2623/t) exw-Durgapur.

Export prices stable: Export rates to China stayed steady w-o-w with a slight drop of 0.5 cents/lb w-o-w to 95 cents/lb CNF Tianjin. For Japan and South Korea too, rates remained stable at 100 cents/lb CNF Tokyo and 99 cents/lb CNF Busan, respectively.

Factors affecting prices

Positive market shifts driven by auctions: Following higher bids at OMC's chrome ore auction on 20 August, offers had increased from producers, but the market was in a wait-and-watch mode for a few days. Eventually, buyers gave in to the offers, and trades were carried out.

The shift in prices was also reflected at Vedanta-FACOR's ferro chrome auction yesterday. The larger lot of 10-150 mm was sold at INR 106,200/t ($1,266/t) exw, up by 3% from the previous auction on 7 August.

Additionally, SAIL-Salem Steel Plant (SSP) concluded a reverse auction for 4,200 t of high-carbon (HC) ferro chrome (Cr: 57-63%, C: 5-8%, 10-70 mm) on 24 August, which was booked at around the L1 price of INR 115,400/t ($1,376/t) FOR (excluding taxes), as per sources.

Offers in the market went up to INR 110,000/t ($1,311/t) exw as well, and a producer who was offering at this price informed BigMint, "Although we're quoting at INR 110,000/t ($1,311/t) exw, buyers are accepting only up to INR 107,000/t ($1,275/t) exw. Only after we secure bulk orders from bigger buyers, can we say that prices have stabilised in the market."

China's market trends: Ferro chrome (HC60%) prices in China fell slightly by RMB 200/t ($28/t) w-o-w to RMB 8,600/t ($1,210/t) exw-Inner Mongolia. In the domestic market, sufficient material was available, and buyers stayed away from exports. However, demand remained subdued with limited buying interest.

Marginal hike in Indian stainless steel prices: Stainless steel prices for 304 grade HRC have been increasing over the past few weeks. On a w-o-w basis, prices increased by INR 2,000/t ($24/t) to INR 183,000/t ($2,181/t) exw-Mumbai. A rise in LME nickel prices and a price hike by one of India's leading stainless steel coil manufacturers prompted this upward trend. However, trading activities remained low in this sector, and prices may stay range-bound in the near term.

Outlook

Prices are expected to stay within the existing range in the days ahead. Although we may see some upward swings, a sharp hike is unlikely. However, the full picture remains unclear, as major sellers and buyers are still on the sidelines. Clarity will emerge once they enter the market.