India: Ferro chrome prices remain supported on increased domestic demand

Indian ferro chrome prices increased by around INR 3,000/tonne (t) w-o-w on increased demand from the domestic market. Meanwhile, a recently conducted auction for ferro chrome fetched prices at upto INR 104,000/t, which further supported the sentiments.

Current prices of ferro chrome are at around INR 104,000-105,000/t ex-Jajpur. Meanwhile, the Chinese market remained silent on limited demand as the country is inactive amidst the Lunar New Year celebrations.

Domestic prices increase after Vedanta auctions

Vedanta recently concluded an auction for ferro chrome, which fetched a good response, with lots getting booked at an H1 price of INR 104,000/t ex-Jajpur. The higher prices at auctions supported domestic sentiments, pushing smaller producers to increase their offers. A decent quantity has been booked at these revised levels, which has increased the confidence of the suppliers.

Lack of Chinese demand

In Jan'22, the purchase price of ferro chrome by Tsingshan was significantly reduced. Further, Chinese steel mills have now entered into the New Year holiday mode. Thus, any increase in prices of ferro chrome is highly unlikely, especially for imports. In addition, lower supply due to the closure of many plants in southern China indicates a rise in prices after the holidays. However, the Indian smelters remain bearish since they do not believe the price increase will be reflected in imports.

Chrome ore prices increase

Indian chrome ore miner OMC held auctions for ferro chrome on 18 Jan'22, which received good response for ores from South Kaliapani mines. Indian ferro chrome prices increased upto INR 100,000/t as demand picked up from China. Although all of the lots in the auction didn't sell, the higher grade lots received bids higher than the base price. Meanwhile, South African chrome ore, UG2 prices increased by $5/t to $180/t CNF China, which are expected to boost prices of ferro chrome in South Africa and China.

Outlook
Indian ferro chrome prices are expected to remain range-bound on limited driving forces for the upward trend. In the meantime, Indian smelters are closely watching the Chinese market for a clear trend.