India: Ferro chrome prices rise following hike in Chinese prices

Indian ferro chrome prices rose sharply by INR 2,800/tonne (t) w-o-w as prices increased in China and enquiries started picking up. In addition, several export deals also got booked with realisations at much higher levels than achievable in the domestic market. This led to an increase in domestic offers and buyers are slowly but surely are willing to accept higher prices.

According to SteelMint's assessment on 15 December, current market prices are hovering around INR 97,500/t exw-Jajpur. However, some producers have begun to offer higher prices as well, but acceptance has been slow due to the upcoming Vedanta ferro chrome auction on December 15th.

Factors supporting ferro chrome prices

• Export enquires pick up: Exporters were inquiring about the ferro chrome market. Chinese purchasers have increased their purchases. Prior to the spring festival, alloy plants began purchasing, and they must accept a slight price increase in order to maintain normal operations. Furthermore, the spot price of HC ferro chrome increased due to an increase in the number of buying inquiries and transactions. The consistent operation of alloy plants results in rigid demand. Furthermore, smelters were more focused on export because they were seeing good returns in the export market. SteelMint recorded approximately 3,000t deals for China at cents 95-96/lb on CNF basis.
  
  
• Domestic buyers wait for Vedanta auction: Indian buyers were waiting for the exact picture to emerge following Vedanta's ferro chrome auction on December 15th. However, according to sources, some small producers sold material at a lower price this week. Good export inquiries, on the other hand, had no effect on remaining major smelters' offers for the domestic market.
  
  
• UG2 chrome ore prices rise: South African UG2 chrome ore prices (40-42% increase) increased significantly as suppliers of deliverable cargo intend to raise prices, resulting in a significant increase in transactional price and spot cargo also became firmer; Alloy producers who need to sustain production must inquire around and procure at high prices. On the 13th of December, South African UG2 Chrome ore offers were hovering around USD 230-235/dmt on a CIF China basis. This also led to hike in ferro chrome prices.
  
  

China's market overview:

As the ferro chrome market showed signs of recovery, China's ferro chrome (HC60%) prices increased by RMB 100/t ($14/t) w-o-w to RMB 8,450/t ($1,212/t) exw-Inner Mongolia. Because of favourable factors, factories were more willing to support the price increase, and finding low-cost spot resources in the market became increasingly difficult. Steel mills found it more difficult to purchase low prices, and bidding prices rose one after the other. In the short term, the market may remain strong.

Outlook
Indian producers are optimistic amidst an uptrend in the ferro chrome market. They are anticipating a further hike to INR 102,000/t exw-Jajpur in the near term amid rising enquiries.