India: Ferro chrome prices sink to 4-month low on lacklustre demand

Indian ferro chrome producers reduced their offers yet again by INR 3,000/t w-o-w in order to close deals due to slow buying. Intense selling pressure on small producers from weak domestic and export markets led to the reduction in ferro chrome prices.

As per SteelMint assessment, prices dropped to an almost 4-month low amid bearish market sentiments.

According to our assessment on 13 April, 2023, the majority of producers were offering at around INR 103,000-104,000/t exw Jajpur. But hard negotiations by buyers amid bearish stainless steel market sentiments forced producers to conclude deals of around 2,200 t at around INR 101,000-102,500/t exw Jajpur.

Factors affecting prices:

• Weak demand: Domestic buyers booked some quantities due to stainless steel production cuts in a bearish market and ample inventory with producers. Meanwhile, due to low export demand, smelters could only sell in the domestic market. Furthermore, demand from China shrunk as many Chinese stainless steel mills reduced production due to low demand of stainless steel. In addition, reduction in ferro chrome purchase tender prices by a Chinese stainless steel giant for April delivery also affected Indian ferro chrome prices.
  
  
• Stainless steel prices subdued: Stainless steel prices remain under pressure. Prices of 304 grade hot-rolled coil (HRC) were at INR 205,000/t ($2,500/t) exw Mumbai, stable on the lower side as assessed on 11 April.
  
  
• UG2 ore prices fall: South African chrome ore prices inched down this week in the Chinese market. The poor performance of the stainless steel market affected chrome ore prices, which had an adverse impact on the chrome ore market. UG2 was offered at $275/dmt CNF China while Turkish chrome ore (46-48% concentrates) offers were at around $360/dmt CNF China on 11 April.
  
  

Outlook

The short-term outlook for ferro chrome is bleak because demand is expected to remain subdued as stainless steel market sentiments remain bearish.