India: Ferro Chrome Prices Unchanged Amid Tepid Demand

Ferro Chrome market remains quiet as buyers and sellers differ on commodity's price amid uncertain currency fluctuation.

Indian Ferro Chrome producers highlighted that there is no real demand coming in from China as they have already fulfilled their import requirement from India. SteelMint learned from market sources, that a major Indian producer has concluded export deals to the extent of 18,000 MT to China in December.

Moreover, Chinese traders are pulling back from taking a position, knowing very well that the major stainless steel firms have limited demand.

SteelMint assessed Ferro Chrome offers at 75 cents/lb CIF China, while counter-offers are at 74 cents/lb, as buyers showing reluctance on the aforementioned price. In line with the Chinese market, offers to Japan and South Korea are at 80 cents/lb and 79 cents/lb respectively.

With prevailing weakness in Chinese Ferro Chrome market, offers in India has also been affected substantially.

In line with the overseas offers, domestic prices also remained unchanged at INR 70,000/MT (ex-Odisha). However, some producers are also quoting higher levels as they have limited inventory, therefore, creating irregularities. Few producers are offering at around INR 72,000/MT but bulk quantity are not been concluded at these prices.

Chinese Market Scenario

Though under the impact of drought season, southern regions of Sichuan, Guizhou, and Hunan etc. have experienced significant production cuts, and most plants indicated a tight supply, but the latest statistics show that HC Ferro chrome production in November was still high at 478,100 MT, just a light decrease from October.

In contrast to the overall high inventory, the actual demand is quite ordinary or even slightly weak. At the same time, as of last weekend, the domestic chrome ore stocks at main ports were 3.054 million tonnes, an increase of 219,000 tonnes from with the previous week. Under such circumstance, the futures and spot markets recently are in a slow and negative state, as the overall trend is somewhat pessimistic. As the negative information gradually emerges, the pessimism in the industry is obviously aggravated. Therefore, although the mainstream price is still around RMB6,600 / ton 50 basis, the actual transaction price is about RMB6,500 / ton 50basis.

On the future outlook, as profits of some plants have already been significantly squeezed thus it is expected that the alloy price will have limited downside, and might be supported by winter storage demand in China. However, with the end of the year drawing close, certain plants in China could be eager to cash out, and might choose to reduce price in order to seek transactions.