India: Ferro Chrome Prices Under Pressure on Lower Chinese Tender Prices

Indian Ferro Chrome prices have yet again dropped under pressure from limited demand and amid sharp fall in purchase prices by Chinese Stainless mills. The prices now have come down by drastically as compared to the previous three months due to deteriorating sentiment, aggressive bidding, and high stocks. Ferro Chrome prices are under tremendous pressure as the market is now majorly dependent on the negotiation levels of the buyers. With the overall Chrome Ore prices coming down, producers are quite pessimistic about the market. Many sellers are reducing their prices to sell the material, which however is pulling down the market.

SteelMint learned that the producers who are dependent on merchant miners for Ore supply are already selling below their production cost. The situation is worsening and the producers are now afraid that they may have to shut down the production of Ferro Chrome temporarily as producing at current rates is not feasible. Furthermore, to tense the situation, Chinese Prices are falling aggressively. Producers were waiting for the Chinese tenders and were expecting some redemption, but, the prices for July deliveries have fallen further down, which has put the producers of Ferro Chrome in obvious distress.

Domestic price for Ferro Chrome in India is assessed to at INR 64,000/MT Ex-Jajpur. Export prices for CNF South Korea (10-50mm, HC 60%) is 74 cents/lb, for CNF Japan (10-50mm, HC 60%) is 75 cents/lb and for CNF China (10-150mm, HC 60%) is around 70 cents/lb. Market sources confirmed that despite reduced prices, the demand in the domestic market is moderate and inquiries from export market remain low. In Japan and South Korea, no deals have been taking place despite lowered prices.

Chinese Market:
Major Chinese Steel mills, Baosteel and Tsingshan have released their tender prices for July Shipments. The prices are down 450 RMB (USD 65.40) as compared to the previous tender. This downfall is the result of stressed market conditions and low demand. Chinese buyers are now demanding material at prices below 70 cents/lb. Such a scenario is attributed to supply-demand dynamics. Chinese Producers are sitting with high inventory and owing to the sluggish Stainless Steel Market conditions, redemption looks unlikely anytime soon.

On the future scenario, Ferro Chrome prices are bound to fall further down owing to the Chinese tenders.