India: Ferro chrome prices unchanged ahead of OMC chrome ore auction

• FeCr supply and demand remain constrained
  
  
• Indian stainless steel 304 series prices remain stable
  
  
• Rise in buying activities in China
  
  

Indian high-carbon ferro chrome (HC60%, Si:4%) prices remained stable w-o-w, consistent with the previous assessment on 10 January. The market witnessed a wait-and-see approach from a majority of participants, anticipating the chrome ore auction by OMC. With both supply and demand remaining constrained, prices remained unchanged.

According to SteelMint's assessment on 17 January, high-carbon ferro chrome (HC60%, Si:4%) was priced at INR 112,700/tonne (t) ($1,356/t) exw-Jajpur. Deals for approximately 1,600 t were concluded within the price range of INR 112,000-114,000/t ($1,347-1,371/t). However, smaller quantities were only booked at higher prices.

On the other hand, high-carbon low-silicon ferro chrome (HC 60%, Si: 2%) prices increased by INR 1,500/t ($18/t) w-o-w, reaching INR 120,500/t ($1,449/t) exw-Jajpur on 18 January.

Weekly market update

Limited market inventory and demand: Despite a noticeable material shortage in the market resulting from ongoing production cuts, prices remained stable as demand did not reach typical levels. Producers, facing reduced demand, opted to maintain prices without significant increases or decreases. Discounts were introduced for bulk bookings and immediate deliveries of smaller quantities, while producers quoted higher offers in response to market conditions.

Varied sentiments in stainless steel sector: Stainless steel prices for the 304 grade showed stability w-o-w, holding at INR 173,000/t ($20,808/t) exw-Mumbai. The domestic market had sufficient supply, leading to reduced demand for ferro chrome as a raw material. The industry's subdued condition was further impacted by liquidity issues.

In contrast, prices for the 316 grade experienced an uptick w-o-w.

Trends in Chinese market: Ferro chrome (HC60%) prices in China maintained stability, registering a slight decline of RMB 50/t ($7/t) and settling at RMB 8,900/t ($1,250/t) exw-Inner Mongolia. The recent snowfall in northern China led to an uptick in purchasing activity, as individuals stockpiled to mitigate potential logistical challenges. Furthermore, reports indicated that a significant stainless steel mill is scheduled for a 2-3 day closure for maintenance, potentially influencing the ferro chrome market.

Outlook

OMC has lowered the base price by 14% for higher-grade material and has made available 45,200 t of material for sale. While the offered quantity has increased m-o-m, it remains below the level necessary to meet market demand. Market participants expect vigorous bidding during the auction. The auction's outcome will offer insights into the pricing trends in the days ahead.