India: Ferro Chrome Prices Touch 6-Week High

Indian Ferro Chrome producers kept their prices unchanged on firm demand followed by low inventory.

"Reduced production of Ferro Chrome due to low demand and lower availability of chrome ore has created a supply crunch," said a source referring to limited stock with the producers.

Considering the current price trend, the Ferro Chrome producers are observed to hold their trade as they are bullish on the commodity.

"Buyers with low inventory are willing to accept higher prices as they require to replenish their stock," said another source.

A rise in Chrome Ore prices by an average of INR 1,400/MT in OMC auction has increased the cost of Ferro Chrome production by INR 3,500/MT, which coupled with costly Met Coke imports due to depreciated INR has encouraged the producers to raise their offers amid eased selling pressure. Moreover, the same is also supported by limited inventory.

This is in sync with Q4 pricing trends, which show a marked rise in chrome ore and Ferro Chrome prices. Unlike India, China depends on imports of the commodity and prices are expected to remain firm in the near term.

SteelMint assessed Ferro Chrome prices at INR 76,000/MT (ex-Odisha) while some of the producers are quoting higher.

The overseas market remains sluggish as inquiries from China is dull. However, the Indian producers have raised their offers on the backdrop of the rising cost of production and in anticipation of higher tender prices by major Chinese stainless steel mills for October.

Export offers are assessed at 78 cents/lb CIF China while no deals are heard to have concluded. On the other hand, Japan has started its stainless steel production and inquiries from the same have improved. The price assessed is 86 cents/lb CIF Japan and 85 cents/lb CIF Korea.

Moving ahead, the market directions are blurry until the volatility of INR stabilizes. However, considering the present scenario, the participants are expecting Ferro Chrome market to edge up.